Could this be? Interesting article yesterday says yes.
According to speakers at the Mortgage Bankers Association’s National Secondary Market Conference in New York, litigation costs can be so high that such risk may motivate servicers to avoid related losses by blocking foreclosures.
Separate provisions of Dodd-Frank address servicing more directly, but as it relates to originations the big issue is defense to foreclosure, said Lawrence Platt, a partner at K&L Gates, Lawrence Platt. “It will be felt by servicers because they are the ones who will be foreclosing.” It is particularly challenging for the mortgage servicing companies that did not originate the loan because they will have to defend foreclosures against claims related to originations about which they do not have enough knowledge. These challenges are powerful enough to ultimately “put a stop” to foreclosures.