"THE MORTGAGE MAZE"

Perhaps you've heard of "securitization"? It goes something like this: "The process begins with the entity that originates the loan, either a mortgage broker or lender. The loan is assigned to a company that will service it — collecting borrowers’ payments and distributing them to investors. Sometimes the servicer is affiliated with the lender, creating potential conflicts if a loan goes bad. A Wall Street firm then pools thousands of loans to be sold to investors who want a steady stream of cash from loan payments. The underwriters separate them into segments based on risk. Once a trust is sold, a trustee bank oversees its operations on behalf of investors. The trustee makes sure that the terms of the pooling and servicing agreement are met; this document determines what a servicer can do to help distressed borrowers."

Maybe this is why so many distressed borrowers are finding it so difficult to get loan modifications, or even figure out simply who holds the mortgages. Dianne Brimmage of Alton, IL, refinanced her home's mortgage (the home she has lived in since 1998) in order to consolidate car and medical bills. Now she struggles with a high interest rate and would like to modify the terms of her loan.

Though in the past this might have been easy to do because it was in every one's best interest, the only concern now is making a profit and there are so many different parties involved in the mortgage process that each one can deny information and manage to put off a solution that is helpful to the homeowner indefinitely.

To read the article in its entirety, go to "The Mortgage Maze May Increase Foreclosures"