Will Pressuring Loan Servicers Be Counterproductive?
Posted To: Voice of Housing
Treasury is becoming impatient with servicer performance despite their investments and success with processing trial loan modifications. The program was/is targeted to help 3-4 million homeowners that were distressed or where imminent default within 60 days was likely. Treasury provided servicers with real economic incentive to aggressively pursue and negotiate loan modifications with the prospect of an up-front fee of $1,000 for each modification ($1,500 if the borrower was current) and $1,000 a year in which the borrower makes their modified payments. Consider that net income to servicers was $161 in 2008, per MBA Cost Study, and you’ve got one heck of an opportunity to make a lot of money while “doing good” as a servicer. Servicers have hired thousands of people over the…(read more)
Written by Tim Rood on November 30th, 2009 with
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