Do Banks Wait to See if Interest rises or Trustee Company Can Find Buyer, BEFORE modifying loan?

As a society we learn to point fingers at social injustice around the world. And that’s not a bad thing. But it is when the person pointing fails to see his own faults. From shark fin soup to the movie The Cove, we pride ourselves on our good taste in fashionable morals. How we decide which animals to grind up for our tacos and which ones to spend billions of dollars protecting. And we have a sense, in the whole scheme of things that there is an underlying selfish motive to not letting dolphins, for instance, disappear from the face of the earth. Something tells us, like Marty from Back to the Future, that messing with things that are way over our head means trouble beyond our ability to fathom. And among scientists of all genres it’s hard to find any who do not agree with this principle. And the same principle applies to the health of the economy and the health of our society.

The theme of The Cove, for instance, essentially tells how sometimes a few people with special interest and instant gratification, quietly and effectively slaughters to satisfy their personal insatiable appetite. Enter the hungry bank… And the damage and cost their behavior inflicts not only on the foreclosure victim, but the financial impact each foreclosure has on each of the foreclosure victims neighbors. What the PR departments of the banks would never want you to consider and calculate is this: Keeping foreclosure victims in their homes with modified mortgages is cheaper than throwing them onto the streets. And because we are all motivated by a touch of self interest, that particular view of how banks become experts at procrastinating and NOT very often successfully and permanently  mortgage loans, costs us more than if they simply lowered the homeowners’ interest rates and put aside their greed.

In an ideal world sliding scales would exist to help people afford what they are willing to work hard for. But when several people in a family working for poverty level wages is forced to pay more each month for the same mortgage principal as a family with a high FICO score, than maybe doing something nice for these people can mean some good karma in the process.

All of the bills in the world will never do any good if they remain voluntary no more than telling people that eating dolphins is a “no-no”. Without penalties, legal recourse, societies intervention, financial penalties or at least good old fashioned accountability expectations on the part of the way banks deal with foreclosure situations, is the ONLY way things will change significantly. Mortgages are legal contracts and protecting interests in a contract is a legal battle. And with all the bills in the world saying pretty things about what banks “should and shouldn’t” do, nothing will change unless foreclosure victims are treated like humans and there are legal ramifications for abusing their rights. For the time being, no one has made the movie called the Foreclosure Cove. But we need one! And the predatory practices are every bit as savage but the victims have two legs instead of tails. And the victims range from infants who will be excluded from a safe and clean place to live simply because he or she was born into a family with financial woes. And the curse placed upon these infants will be tenacious as their parents, who face foreclosure, will not be ably to shed the after-effects of the damage to their credit until these children are big enough to work on their own. Their parents will be rejected from apartment rental applications, and pay more for every purchase made on behalf of their growing children for years and years in the form of exorbitant  interest.

In keeping with our metaphor of food and predatory practices, here is omeFood for thought… Maybe this is worth pondering… and observing to see if there is any evidence of a pattern. Is it possible that lenders, during the review process for a pending application for a loan modification, base their decision in part on how much progress the trustee company is making in finding potential buyers. Advertising the property on a website throughout the entire modification process, never deleting the listing and accepting inquiries. It would be a great way for a bank to test the waters to determine whether it pays to reduce an interest rate or just simply sell if the bank knows there is a buyer or two ready. In the meanwhile, the current owner maintains the property while the trustee company advertises it for sale. All along, telling the buyer they need to send in the same documentation 6 times: drivers licenses, marriage certificates, utility bills… (Typically things that have been in the banks possession for many months.) This drags the process on and on. There is something to be gained from procrastination or the process would be expedited! Just as the process is expedited when interest rates are soon to fall and lenders become the Guinness Record holders for fastest paperwork processors. And when the interest rates are promising to rise, well, it… sure… starts… to… mysteriously… slow… down… doesn’t… it…?

One Response to “Do Banks Wait to See if Interest rises or Trustee Company Can Find Buyer, BEFORE modifying loan?”

  1. берем……

    As a society we learn to point fingers at social injustice around the world. And that’s not a bad thing…..