[quote=SK in CV] . . . As far as the banks (or more precisely, the lenders, because most were NOT banks) faring better with foreclosure, I think he’s just wrong on that. Many lenders had little risk (as compared to the volume of loans they were originating) because they unloaded the loans almost as fast as they could fund them. For their held inventory, some purchased CDS’s to cover the risk. It’s the loan servicers that fare better with foreclosure. He is correct to the extent they were the same party (Countrywide, now BofA comes to mind.)…[/quote]
Yes, SK, I meant LENDERS and usually always use the word “lenders” as it pertains to trust deeds. Most of the trust deeds I’ve seen filed in conjunction with MERS as a beneficiary list the “servicer” as a “too-big-to-fail bank” (aka “WAMU/Chase) and MERS” but are IN REALITY “REIT and/or individual investor and MERS.”
In a couple of transactions I am currently involved in with B of A (formerly “Countrywide Funding”), Servicer B of A will NOT consummate a deal (in favor of the delinquent borrower) until the owner of the 2nd TD accepts .06 on the dollar. That is their policy and the instructions their “contractors” working on these deeds-in-lieu/modifications have been given. This is one reason why these transactions are taking so long (while the foreclosure process is held at bay).
I’m finding myself sympathizing with all the homeowners making timely payments in states that espouse judicial foreclosure :=(
