While I don’t disagree with your conclusion (which is, essentially, “b” from my original post) I don’t think your thought process is correct. The servicer and the ultimate “owner” of the mortgage are rarely the same entity. The only thing the servicer is really trying to accomplish is the most cost effective manner of protecting the value of the underlying mortgage for its ultimate owner, whether that’s a bank, thrift or mortgage-backed security holder. In other words, the servicer has no economic incentive to “pretend that the mortgage is still an asset” (as you put it). I think the only thing servicers are concerned with these days is doing whatever they have to do – whether it’s foreclosing or modifying the loan – to avoid getting sued by the true note holders. Any other thoughts?
