They say they do. The government has provided $ 75 billion in taxpayer money and told them to. But many of them are slow because help struggling homeowners is a financial conflict of interest for them.
When the program “Making Home Affordable” was announced, financially strapped homeowners should find some relief. And some did get relief in the form of a refinanced loan or a mortgage loan modification.
However, many others find that their mortgage agent is put off.
Mortgage companies are paid to serve the mortgage and they collect a percentage of the value of loans they service. They paid the fees by the investor if the owners make their payments or not.
Consumers who are behind on their loans are less likely to get help because mortgage managers also collect fees up to 6% of the payment amount each time a payment is late . Thus, they are in no hurry to help get these loans.
Consumers and investors are suffering, while lending managers reap huge profits.
On the surface, the program “Making Home Affordable” seems to be an incentive for loan servicers to help consumers. They receive $ 1,000 when they modify a loan, and another $ 1,000 per year for the following three years.
However, when a house goes into foreclosure, the costs can far exceed that paltry $ 4,000.
They collected consumer late fees until the mortgage is in permanent fault. Once it is in foreclosure, start to collect more fees from investors. The possession of a house, checking the title, the organization for the maintenance, control assessments, and other tasks are all fresh. In addition, a mortgage agent is free to use suppliers of choice for the legal work, property relations, and insurance policies.
This work can be sent to companies that loan officer owns or has an interest. Again, profits grow.
The monthly management fee may be a reason why mortgage managers reject the offer routinely, and why they often list foreclosed homes at higher prices than their real estate professionals suggest. More a home remains on the books more they collect from investors.
Then – mortgage managers are morally (and legally) the obligation to do the best thing for investors, and they claim to want to do the best thing for homeowners in difficulty, they seem to play the “collect money game” all angle.
When I was a child that was called “Playing both sides against the middle.”
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