Update from the Foreclosure-Based Society 0
Discussing a proposal in Massachusetts to mandate mediation in foreclosure cases, Davd Abromowitz explains how short-term incentives militate against mortgate mediation:
And while foreclosure may yield less money for investors in the long run when all the costs are factored in, many of the foreclosure costs come “off the top’’ from the foreclosure sale, and are not borne by the servicer making the decisions.
In short, the mortgage pooling system that was set up to encourage private money to flow into mortgages and make them cheaper for consumers is now a virtual doomsday machine for the economy, pushing the process to foreclose on homes instead of modify loans.
In other words, kicking persons into the street is easier and more profitable than keeping them off the street.
Low-hanging fruit and all that.