These are companies that are set up in order to service mortgages. That frees up lender banks by giving them a profit on their loan, be it at a lower percentage. That allows for the lender bank to give more loans.
The largest cause of the entire mess lies with the government. They are the institution most likely to not only require the lending of money to high risk borrowers, they are also the entity that delays the process through excess litigation opprotunities and paper work.
The real winner is the attorneys. The lifeblood of the court system and government is an ever increasing supply of attorneys. They are the ones representing the banks, the borrowers and the courts.
Whenever you engage in the legal system there is a minimum of three lawyers gaining significant payment, the plaintiff attorney, the defense attorney and the arbiter or judge, also an attorney. The prime job of the judges is to make sure that the other two lawyers get paid. They are the parasites of a capitalistic society.
The real loser is the average citizen. We bear the costs in higher lending rates, taxes and inflation caused by a litigious and over regulated society.
As for me I say a “a pox on all houses” involved very few have even started looking a the numbers of cabals involving the banks, the builders and the appraisers, which also helped fuel this fire. Then there are all those who blame the buyers for failing to following their legal and moral responsibilities and yet have no words of condemnation for the banks and the servicers who fail to follow the real-estate laws and ended up entangling the paperwork into knotted messes which will take years to sort out and what of their legal and fiduciary responsibilities to their investors to follow the law and take care of foreclosure in a reasonable and timely manner? What of the number of State AG’s who when faced with the vast number of civil and criminal laws broken by parties involved allowed a buyout of the law? Lots of blame, but little acceptance of responsibility from anyone for their part in things. Seems now days if you are rich enough you can break any number of laws as long as you pay off someone. How far do you think a regular person would get by offing to pay the state some money if they agreed to for go investigation and prosecution?
The ones that really get me is those who say to hell with the law and get the ‘deadbeats’ no matter what even if you have to ignore the law. People have always been able to take advantage of the law and many times it takes a while to close loop holes and such, but the minute you start calling for laws to be ignored and vengeance parted out we become a lawless nation and no long Republic.