“Mortgage companies” are off the hook as they are no longer performing as funding agencies but have become mere order-takers.
The losers here are the institutions who bought the mortgages expecting to get a higher post-teaser rate for the bulk of the loan. Now they’re getting screwed out of that higher rate for five years.
It remains to be seen whether that is better for them than losing some amount of interest and principal as homes go into foreclosure, which is as widely and frequently stated, and without any real analysis, as any Democrat talking point.
They will be lucky if they get their principle returned at this point. They should be doing back flips at the prospects of getting any return at all. These funds are losing hundreds of billions of dollars due to foreclosures.
A lot of those institutions, though, are the institutions that negotiated the deals. It’s simply a business judgment on their part. They recognize that if they don’t freeze rates for some homeowners, then those homeowners will default, and that leaves them even further in the lurch.