Restructuring of mortgage loans gets tougher
In January, loan analyst Moe Bedard noticed a promising development in the mortgage-servicing industry: More lenders started restructuring distressed borrowers’ loans to avert foreclosure.
But in the months that followed, the trend reversed.
“Now, it’s even harder to get a modification than it was five months ago,” said Bedard, president of Loan Safe Solutions, based in Coronado, Calif. “They’re just stalling now.”
The “they” to which he referred are loan-servicing units, the bank departments that negotiate with troubled borrowers seeking lower rates and lower monthly payments on their subprime mortgage loans.