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Foreclosure Refinancing  

Foreclosure Refinancing- Is The Ideal Solution For Everyone   


Many people fail to realize that foreclosure refinancing is the best situation for everyone.  Although some may think that mortgage companies don’t mind seeing loans go into foreclosure, this is simply not the case.  Mortgage companies have many reasons why it is not to their benefit.  In fact, the current subprime crisis was due in large part where one part of the mortgage company (origination) failed to act appropriately to the detriment of another part of the mortgage company (loss mitigation).  This action was essentially where many home owners were placed in loans they were not reasonably able to afford and the result was subprime mortgage crisis.   


Sadly, this whole affair could have been averted or significantly reduced with some more responsibility being handled by the origination side of these businesses.  Instead, many mortgage companies are now scrambling to compensate on the loss mitigation side of their business.  Here, is why: 


As a general rule, mortgage companies actually prefer that homes not go into foreclosure.  This is because mortgage companies incur a great deal of costs when controlling a home through the foreclosure process.  These can include inspection fees, sheriff fees, auction fees, and more.  All these costs hurt their bottom line when you take into account hundreds or thousands of homes going into foreclosure.   


Another reason home mortgage companies don’t like loans going into foreclosure is that it significantly hurts their reputation as home lender when more of their homes end up in foreclosure.  Think of how difficult it is to promote your company as a company that gives people homes when you are turning people out into the street.  

For this reason, many mortgage companies work hard to help people bring these loans current through foreclosure refinancing or mortgage modifications.  However, the current subprime mortgage meltdown shows that some mortgage companies are much more responsible in this area than others.   

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