If education is like a crunchberry--cash or credit--then why stop with refinance loans for college? Are mortgage lenders really refusing to modify mortgages solely because of all of the "anticipated documented fees" they can generate from a complete repossession foreclosure? Is the problem really all about the refinance income or is there something more to find there?
The New York Times reported about twelve days ago that the HAMP mortgage refinance lenders were reluctant to engage consumers in loan modifications because the banks collect such lucrative profits on delinquent mortgage refinance loans. There is a perpetual body of evidence to support the "lucrative profit motive " disincentive hypothesis. For example, the Federal Reserve Bank of Boston recently showed problems with a new refinance case study that concluded that only 2% of the seriously delinquent mortgages had been modified due to the " lenders expecting to recover more money from a foreclosure than a modified loan." And, the number of reported bankruptcy cases where mortgage refinance lenders have been sanctioned for imposing illegal and immoral "collateral and anticipated fees" is substantial and perhaps monumental in their numbers.
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