As to who forecloses…well it is the servicer. They get the ball rolling, nobody else. The servicers, on behalf of the beneficiary control that process.[/quote]
You are inaccurate about this.
The lenders (or lien holders or note holders or whatever) are the employers of the servicers and can veto their actions.
I am doing one with Aurora right now.
Aurora has misrepresented some of the components of this deal and the seller has had me contact the note holder (who is a major east coast financial firm).
The financial firm has postponed the short sale and we are now dealing with them.
While I do not dispute that it is sometimes in the best interests of the servicer to foreclose, I think that they try very hard not to act in any way that appears to place their own interests above those of their lender.
Now that last thought is pure speculation but it is consistent with both observable behavior as well as models of lien holder and servicer incentive structures.[/quote]
Which is why I said “on behalf of the beneficiary”. What I have seen is that when the bene is a single entity, they’re much more likely to have input. When the bene is a REMIC (either private label or GSE) the likelihood that they’ll get involved in anything the servicer does is less likely. Not impossible, just less likely.
I have a recollection of there being some pretty significant complaints against Aurora in the past, and some litigation about how they were handling…now I can’t remember if it was short sales or mods. Litigants were attempting to get their class certified. Not sure what happened with it.
And yes, the servicers attempt to appear as if their clients recovery is most important. Even as they’re taking kickbacks from foreclosure attorneys :).
