29 July 2008

Loan Servicers Under Stress

One of the funny bits of the current mortgage market is that even when the banks hold the loans, they don't generally handle the money.

They pass this off to loan servicing firms, who send out the bills, collect checks, handle escrow, etc.

Well, it appears that they have to make payments of interest and principal to the loan holders for accounts up to 90 days delinquent, in addition to handling property tax payments, and as a result, they are taking a beating from the skyrocketing rate of delinquencies.

H/t HousingWire


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