We've talked about debt workout programs as a way to avoid foreclosure. However, you also have to know who owns the loans. US Treasury Secretary Henry Paulson recently described the problem succinctly:
The company collecting your mortgage payment every month is most often doing that on behalf of those who own the mortgage, and they are limited in the decisions that they can make on behalf of those ultimate owners who are spread all over the world.In other words, your bank may want to work with you -- but lack the power to do so. Some loans are owned by investors and cannot be changed due to contractual constraints. Stay tuned and we'll see how the folks in Washington DC plan to make all the moving parts work together. [Via the Marketplace Podcast]
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