Word: loaning
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...prickly problem, though - as Dugan has pointed out - is that the available data from the OCC and OTS are rife with flaws. For instance, nowhere do servicers report what, exactly, they're doing when they modify a loan. And that, as it turns out, is an incredibly important detail since other data show that in many cases what they're doing is increasing a struggling borrower's monthly payment. The Maryland Office of Financial Regulation, which collects data on some 380,000 loans from 65 servicers, found that of modifications completed last August and September, 42% kept the monthly payment...
...That's why on Feb. 2, a group of 15 state attorneys general and banking regulators sent a letter to the OCC and OTS complaining that its data was muddying the public debate and begging for details about the modifications it tracks. "People are concerned about the effectiveness of loan modifications, which is very troubling to us," says Iowa attorney general Tom Miller, who has been dealing with servicers as head of the 17-month-old State Foreclosure Prevention Working Group. "If they're bad modifications and people default at a higher rate, it's not surprising. But that shouldn...
...reason servicers haven't more wholeheartedly adopted bolder tactics is lingering concern over getting sued by investors who are ultimately entitled to the loan payments through mortgage-related securities. Servicers are contractually bound to act in the interest of investors overall, but they might still not rewrite loans, even when that creates the most value in the aggregate, since modifications can impact certain investors more than others - and it only takes one to sue. That's why on Feb. 4. the House Financial Services committee met to talk about making a law to shield servicers from such lawsuits...
...even such a law combined with financial incentives for modification won't guarantee that servicers will do what it takes to avoid foreclosure in the long run. Over the past few months, as loan defaults have continued to rise, the Maryland Office of Financial Regulation has noticed an increase in servicers crafting modifications with lower monthly payments. That's a good sign - unless, perhaps, those lower payments come with a balloon payment further down the road, as White has often noticed in the loans he's studied...
...benefit of) a Senior Executive Officer made upon severance from employment that exceeds specified thresholds. Under EESA [The Emergency Economic Stabilization Act], such compensation is limited to three times the executive's annual base salary ... Haircut: Difference in the value of the collateral and the value of the loan (the loan value is less than the collateral value...