[quote=davelj][quote=werewolf34]
Who wins if the REOs process quickly?[/quote]
The servicers. It gets one more headache off the work schedule. And maybe saves them a little money.
[quote=werewolf34]Who loses if the REOs process quickly?[/quote]
Maybe We the People… as we’re underwriting the Fannie/Freddie losses. It does NOT help the MBS investors very much because the prices of these MBS already trade deep down in the murky toilet waters.
It’s clear that the government is pulling out all the stops to halt the decline in housing prices, but I don’t think there’s a lot of intentional private sector activity that’s keeping properties off the market. Perhaps a little… but not much.
Where the banks are dragging their feet – and where some games will be played over the next couple of years – will be in COMMERCIAL real estate. The problems in residential real estate are a bit of a red herring at this point where banks are concerned.[/quote]
The servicers advance the monthly payments to the investors. They recoup those payments *and* the late fees when the place gets sold. In that scenario it makes sense for the servicer to keep the current owner in the house for a while, let the fees grow and foreclose when the market value of the property comes close to what the servicer will get after trustee sale.
