Foreclosure is a fraud. A delusion. And the servicers are not in control.
And frankly as long as courts allow the delusion, the fraud of servicers acting as parties that have any interest when in fact they are only straw parties….nothing will really change.
Right now, foreclosure defense attorneys are in the cross hairs….but until courts take a deep breath and realize the impact of the deeper issues….we’re all in trouble…
No solutions will be had, no negotiations, no resolution until the real parties come before the court. An entire system of mediation, set up to fail…untold hundreds of millions of dollars in taxpayer resources because the real parties were not at the table.
Principal Reduction. As previously raised with FHFA in both formal and informal
communications, we believe that loss mitigation programs that employ principal reduction as one
of many available options are most effective in achieving affordable and sustainable loan
modifications. Moreover, a loan that is modified such that the borrower can afford to stay in the
home and continue paying is generally far more financially advantageous for lenders and
investors when compared to foreclosure. As such, modifications utilizing principal reduction can
help preserve and conserve the GSEs’ assets, a FHFA mandate, while also stabilizing families
and neighborhoods (a second FHFA mandate). Data from HAMP and the national mortgage
settlement clearly demonstrate that principal reduction is an effective method of addressing
negative home equity. Numerous studies (including from the Congressional Budget Office and
the Federal Reserve), and our experience through the Massachusetts HomeCorps program,
demonstrate that principal reduction guided by a net-present value (NPV) analysis can generate
affordable and sustainable loan modifications.