Foreclosures becoming profitable?

No one likes the current real estate situation. Homes are not selling and lenders are not making loans. Foreclosures are rising at a record rate. It would appear no one is winning. Appearances may be misleading.

Gretchen Morgenson of the New York Times recently wrote a fascinating article on November 6th which can be read in it's entirety here.

A few of the interesting observations and opinions as I read the article are:

"Because there is little oversight of foreclosure practices and the fees
that are charged, bankruptcy specialists fear that some consumers may be losing
their homes unnecessarily or that mortgage servicers, who collect loan payments,
are profiting from foreclosures."

"Now that big lenders are originating fewer mortgages, servicing
revenues make up a greater percentage of earnings. Because servicers typically
keep late fees and certain other charges assessed on delinquent or defaulted
loans, ''a borrower's default can present a servicer with an opportunity for
additional profit,'' Ms. Porter said. "

"She also found that some creditors ask for fees, like fax charges and
payoff statement fees, that would probably be considered ''unreasonable'' by the
courts."

The New York Times article credits Katherine M. Porter, associate professor of law at the University of Iowa with providing much of the information used in the article.


Related Florida real estate views:

President Bush not completely happy with housing bill

HUD is coming to a theater near you

Banks that are selling houses in Deltona


- Greg Staker - Watson Realty Corp. - 407-304-0255