Servicers: Those Who Don't Need Help Clog Up Loan Mods

Some consumers who do not need help with their mortgages are clogging up the loan modification efforts of servicing companies, according to participants at SourceMedia's annual servicing show. One mortgage executive, requesting anonymity, said her shop currently has 4,000 loan modification cases in the pipeline but "1,700 are for people who are current. We're seeing people who don't need the help." Servicing professionals attending the show relayed stories of mortgagors who attempt to get their loans modified because friends and family are doing the same. Meanwhile, Jay Brinkmann, chief economist for the Mortgage Bankers Association, told attendees that loan modification efforts are driving servicing costs "way up," resulting in a reduction in productivity. MBA is working on a new servicing cost study but has not finalized its findings.