Oh, NOW Banks Believe in Mortgage Modification?
By: Cynthia Kouril Thursday June 3, 2010 12:07 pm
You know when I was growing up, foreclosure was a scandal. And in the early days of the burst housing bubble, most people still thought that it was. The people losing their homes were treated by courts, press, and society at large like deadbeats and ne’er-do-wells.
Then we began to learn the truth about predatory lending practices that steered homeowners away from conventional mortgages and into subprime mortgages. We began to learn that mortgage originators wrote loans with no assessment of whether or not the homeowner could actually make the monthly payment, because the originators were making their money on the fees, not on the loan repayment.
We learned that Too Big To Fail banks got paid 100 cents on the dollar in federal bailout money for the toxic assets supposedly backed by these mortgages. Doesn’t that mean the mortgage debt has been paid in full by the feds? Doesn’t the federal government own those mortgages now? Still, the banks and their servicers continue to file foreclosure actions on houses for which the debt has already been paid by the government.
Is it any wonder that people who thought they were entering into a legitimate business transaction and faithfully paid their mortgage for as long as they could found out that their lenders were not dealing with them in good faith on mortgage modifications? And this is despite the fact the government mandated and paid the lenders to do such modifications under HAMP and HARP. Is it any wonder they feel that the social contract between them and the bank has been broken? more