Loan Modifications: Selling Loans Means Being Sold Down the River

By Mandelman

This won’t take me very long, I promise.

As a nation, we want to see loans modified, right? Homeowners at risk of foreclosure certainly do, but they’re not alone, right?. The president says he wants loans modified. And the Treasury Secretary too, right? And so do mortgage servicers and investors in mortgage backed securities, so I’ve been told. Even Fannie Mae, who absolutely cannot stomach the idea of even one dollar in principal reduction, is pro-loan-modification, right?

Yeah, that’s what I thought I’d heard and read… just wanted to make sure I had it right.

We all know the process of getting a loan modified falls somewhere between, “stressful but fairly straightforward,” to something more along the lines of, “so indescribably infuriating that my husband shot himself in the head.” It’s quite the range, I understand.

For the record, I’m going to go out on a limb and say that I probably hear from or talk with as many homeowners in the loan modification process as anyone in the country, how’s that? In don’t really know if that’s true, but I’d be willing to bet it is because I’ve noticed that no one else who writes on the subject was dimwitted enough to put his or her email and cell phone online.

Yeah, just try to reach Yves Smith over at Naked Capitalism by phone or email, for example… and good luck with that. Or how about Matt Tiabbi at RS… let me know how that works out. Me, on the other hand… if you’re in foreclosure, I’m you’re contact-Huckleberry… my phone can ring at 2:00 AM when a homeowner who couldn’t sleep, started reading me online.

But, we don’t seem to be able to do anything about our hinkey little consistency issue we keep having with the loan modification process, for whatever reason. I’ve come to accept that it’s completely un-friggin’-solvable… like we’ll probably see peace in the Middle East long before any two loan modifications go the same way.

There’s truly nothing in our society today, and I’d have to think nothing in post-Civil War American history, that compares with today’s loan modification process. (If you missed that last one, go back and read it slower this time.)

If I had to peg the average, I’d say it’s something north of, “I can’t even believe I lived through that,” and a few clicks …read more