The Times continues on the next page: "It frustrates me when I see; the government looking to the servicer for the solution, because it will never ever happen," said Margery Golant, a Florida lawyer who defends homeowners against foreclosure and who worked in the law department of a major mortgage company, Ocwen Financial.
established its own title company, Premium Title Services, in part to keep more of the revenue from foreclosures, said Ms. Golant
, who helped start it.
"It was hugely profitable," she
"Premium Title would charge for the title when it got transferred to Ocwen
, then charge again when it got transferred to the new buyer, and then sell title insurance.
It was easy money.
Mortgage companies not only gain this extra business through their subsidiaries, but also collect reimbursement for the payments when the houses are sold.
The investors who own bad mortgages accept whatever is left.
Investors typically do not notice how much they give up to the servicers, because fees are embedded in complex sales.
"It's under the radar," Ms. Golant
Ultimately, the benefits of delinquency erode incentives for mortgage companies to dispose of troubled loans quickly, say experts, allowing distressed houses to decay and fall in value - a fact of little interest to the servicer.
"At the end of the day, it doesn't matter what the house sells for, because they don't take that loss," said Ms. Golant
"Meanwhile, they are collecting all these fees."