Consumer Law

Law Firm Incentives to Avoid Foreclosure

By Alan White

In an interesting story today, the Philadelphia Inquirer reports on an initiative by Fannie Mae & Freddie Mac to provide foreclosure firms with financial incentives to negotiate repayment plans and loan modifications, instead of foreclosing. Fannie Mae reportedly is willing to write down principal as well as interest to save homes. Unfortunately, servicers in the subprime market cannot turn to an investor like Fannie or Freddie to obtain these sorts of incentives. The rights and duties (and compensation) of subprime servicers are usually fixed in pooling and servicing agreements that cannot be modified without the unanimous consent of investors, an unlikely eventuality.

Full post as published by CL&P Blog on March 24, 2008 (boomark / email).