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
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.