Read at your leisure...I need to make a phone call...Just as soon as I determine whether I should laugh hysterically or vomit....
Mortgage servicers next victim of housing crisis
By Al Yoon - Analysis
NEW YORK (Reuters) - The halcyon days of the U.S. housing boom were a veritable gravy train for companies in the business of collecting monthly mortgage payments from homeowners.All these so-called "mortgage servicers" had to do was process the monthly cash stream from borrowers, who generally paid on time, and forward the money to mortgage security investors, pocketing a percentage of each loan they handled. It was a highly automated, low-overhead and very profitable enterprise.
What's more, mortgage servicers are so ill-equipped to handle the deluge of defaults that they may be worsening the housing crisis and pushing the U.S. economy closer to recession.
Servicers of subprime loans, such as Ocwen Financial Corp (OCN.N: Quote
), are in the worst predicament since the companies must send payments to investors of mortgage-backed bonds created out of pools of home loans even if homeowners are delinquent, analysts said.
"Servicing is going to be the focus, in my view, of how we get out of all this," Tom Marano, global head of mortgage- and asset-backed securities at Bear Stearns & Co., told the firm's customers at a conference in January.