[quote=SK in CV] . . . I think they (the lenders and loan servicers) really are that bad at managing distressed assets.[/quote]
How did they get so bad?
Was it the fact they were only “servicers” and had little or no financial stake in the mortgages they immediately sold to GSE’s, instead of holding in their portfolio (as lenders in the past did)?
Was it the quality and/or inexperience of their workforce who may have had an inferior public education to their predecessors?
Was it the sheer volume of defaults (both involuntary and strategic), which overwhelmed their employees and they couldn’t hire fast enough to get new employees up to speed?
Or was it the political pressure to initiate a “workout” with all these deadbeats, who, sensing the political pressure on the lenders, worked the “system” to bleed it for all it was worth?
OR, perhaps it may have been a combination thereof.
I still don’t see any of these reasons as an excuse to allow a defaulting trustor to “squat” for THREE YEARS or more, as many of them were able to.
That’s enough time to get a “wayward trustor” thru law school, without any living expenses except for utilities!
This little “experiment” wasn’t fair to the poor slobs who hung in there and kept making their house payments on time (even during hardships).
