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  • Bank of America Facing Mortgage Servicing Losses [View article]
    The requirement that servicing companies make advances to investors even when loans are not performing is a large part of why these loans have not been worked out yet. Why should the investors take a 15% haircut by reducing the principal and payments on their loans when the servicing company will pay them regardless? Why not just let the servicing companies go broke at your expense, and work out the loans later if it's still necessary?

    The turning point in the mortgage crisis will occur when the servicing companies all go broke or start walking away from contracts. Then the mortgage owners will be accountable for getting the most returns out of their loans and preventing foreclosures. You can bet that with those incentives, negotiations for loan restructurings will begin in earnest.
    Jan 12 11:26 am |Rating: +1 -1
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