Bad Credit Florida Mortgage Modifications: Not Easy

Little can be done to change the terms of bad credit Florida mortgages to prevent foreclosure because of the way loans that were packaged and sold to Wall Street investors.

Despite calls by lawmakers and regulators for mortgage investors to help borrowers facing foreclosure, the current standards for mortgage finance are just not flexible enough, Michael Marriott, a co-head of Credit Suisse’s mortgage group told a mortgage conference.

“When we began to look at the complexity of the ownership of these (investments) … You have tax issues, you have REMIC (Real Estate Mortgage Investment Conduit) issues and accounting issues (that) makes it very, very difficult to do the right set of things” to help borrowers, Lund said.

Patricia Cook, executive vice president of investments and capital markets at Freddie Mac, said “standardization would be helpful … I think clearly the market would benefit from some standardization.”

Still, she said, mortgage investors often have to balance “flexibility around [Florida mortgage refinancing] those loans with the restrictions that we have.”

David Lowman, CEO of Chase Home Lending, the mortgage unit of JPMorgan Chase, said the calls for investors to ease off on troubled Florida mortgage borrowers will increase in coming months.

“Once people start realizing that they might not get their principle back, they may want to chance the rules of the game. I think you are going to start seeing that happening. That just has not played out yet,” he said.

SOURCE: Reuters