Mortgage Processor: Loan Mods Don't Work
According to Lender Processing Services, which processes mortgage payments and tracks roughly 80% of all outstanding mortgages, loan modifications very often do not work.
"Industry evidence indicates that in a majority of instances loan modifications simply delay the timeline from default to foreclosure but don't prevent them from taking place," Nathaniel Otis and William Clark, analysts at KBW, wrote in a note to investors on Tuesday.
Some companies, including IndyMac, are finding out that even well-intentioned modifications simply do not work. This would be (and will be) more money down the toilet.
FT points out that the plan would likely have the perverse consequence of increasing foreclosures by convincing current loans to go delinquent.
"Industry evidence indicates that in a majority of instances loan modifications simply delay the timeline from default to foreclosure but don't prevent them from taking place," Nathaniel Otis and William Clark, analysts at KBW, wrote in a note to investors on Tuesday.
Some companies, including IndyMac, are finding out that even well-intentioned modifications simply do not work. This would be (and will be) more money down the toilet.
FT points out that the plan would likely have the perverse consequence of increasing foreclosures by convincing current loans to go delinquent.
posted by Richie Rich | 6:58 AM
<< HOME