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AS I'VE OFTEN REMARKED, I CAN'T think of a business I'd rather be in than mortgage banking. It assists individuals to realize financial rewards and personal dreams of homeownership, and at the same time it can be profitable. Very few businesses can honestly make such a claim.
As an industry, we should be proud of the role we've played in our nation's achievement of a record rate of homeownership. But originating a home loan is just the beginning. We must also commit ourselves to ensuring borrowers keep their homes.
When the Mortgage Bankers Association of America (MBA) released the results of its National Delinquency Survey for fourth-quarter 1999, there was real cause for celebration. The survey reported the lowest combined delinquency and foreclosure rate since 1973. Yet this accomplishment can be improved upon, especially in light of the foreclosure figures. While conventional loans in foreclosure declined, government loans in foreclosure measured a small increase.
Curing delinquencies and preventing foreclosures by utilizing all available workout options should be a goal of every loan servicer. Helping borrowers keep their homes through workout programs is not just the right thing to do; it is good business.
Today, loan servicers have access to a variety of tools and programs that make loan modification, forbearance and other workout methods savvy, cost-effective business strategies.
Foreclosure vs. workout expenses Servicers, mortgage insurers and investors variously share expenses totaling approximately $2,500 on average in a foreclosure. Conversely, the...