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I don’t believe that we will have an economic recovery until we resolve the mortgage crisis. The media may have moved on to congressional body parts, but the mortgage crisis is still very real and the engine of financial entropy. In discussions with foreclosure attorneys for the banks, it seems clear to all parties involved that the mortgage servicers and investors are not motivated to resolve the problem. They seem to have no interest in providing modifications, approving short sales or accepting deeds in lieu [DIL]. There sole concern is there stock price. They fear the more they modify, short sale or DIL, the more they will have to write-off and the lower their stock price will go.
Therefore the answer is to change the rules of the game so that the defaulted loans are already taken into account in the stock price as if they were foreclosed. That would remove the impediment from the servicers and investors providing timely solutions to homeowners. The quickest way of moving this forward is to change SEC accounting guidelines so that any loan over 90 days delinquent must be written off their books in their quarterly reports as if it were foreclosed. That would remove any financial market downside to a quick resolution of the default.
Filed under: activism, congress, Corporations, News Tagged: | banks, business, deed-in-lieu, Default (finance), Financial Services, foreclosure, investors, modifications, mortgage, Mortgage loan, servicers, Short (finance), Short sale (real estate), Subprime mortgage crisis, united states
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