EMC could be a special case because Bear Stearns is the originator, servicer, and (bag)holder of the loans.
What happens when securitized loans goes into default? Is loss prevention up to the discretion of the servicers, or do the owners of the mortgage securities participate actively? Do servicers have any real economic incentive to keep people out of foreclosure?
It seems to me that if foreclosure prevention were all that simple, Countrywide wouldn’t be stuck with thousands of REOs.
