ProPublica has released an eBook entitled, "The Great American Foreclosure Story." It is available as a web page, and runs about 16 pages of text.
They are well worth reading. Of particular interest is a look at why programs
like HAMP have been lackluster successes at best. One
excerpt from the entire text is the story of Chris Wyatt, a former employee of
Litton Loan Servicing.
Have you ever wondered why your loan modification documents were lost,
re-requested, and then lost a second time? Companies like Litton Loan
were not receiving the documents. The documents were, in fact, ending
up at an outsourcing firm in India. This is because Litton Loan, like
other mortgage servicers, was not ramping up its loss mitigation staff.
It was ramping up its collections staff.
Per Chris Wyatt, this led to a corporate culture where loan modifications
were often denied due to missing documents -- documents that could not
be verified because they had been received by a company on a different
continent. In Mr. Wyatt's own words:
"They could have addressed the crisis way earlier. Had companies changed
their philosophy and said, 'You know what? We're not going to
beef up our collections staff; we're going to beef up our loss mitigation
staff.' Had they done that and come up with loan modification scenarios
that were reasonable and put people into more affordable payments early
on, we wouldn't be where we are now."
The drive to maximize profits, as opposed to minimize
foreclosures, has left us where we are now. I highly recommend The Great American Foreclosure
Story to anyone interested in learning more about the foreclosure crisis,
its causes, and its effects.