A new study by NCLC is finding that mortgage servers – and their banks – are finding it cheaper to foreclose than offer a loan modification.

NCLC, or the National Consumer Law Center, shows that despite several programs designed to encourage loan modifications, Americans are still facing a record number or home foreclosures.

The report reveals that servers don’t have the risk of loosing money on foreclosed properties like homeowners do – instead, mortgage servers can actually make money on the procress.

Diane E. Thompson, an attorney with NCLC, said despite the fact foreclosure is a costly ordeal for the homeowner, banks and mortgage brokers continue to outstrip loan modifications because a lack of personal accountability or incentive to keep the owners in their homes.

The financial industries that usually collect payment and administer loans are a key player in the current housing crisis, since these original lenders frequently sell the loans to investment trusts that rely heavily upon the day-to-day activities of the bank.

The report found that mortgage servers and accompanying banks often deny homeowners principal and interest rate reductions because it is far more profitable to offer repayment plans or forbearance agreements.

Finally, encouraged by a lack of third-party overseers – such as the government – mortgage servers have an open-ended door to pursue a record number of foreclosures.

The NCLC recommends many different steps in improve the situation, such as loan regulation, mandated loan modifications, and more transparency on how servers report loan information to investors.

Be Sociable, Share!

•