What incredible logic! Providing another loan to deadbeats. Most of the individuals receiving loans are not home owners. They are home occupiers, stiffing the legitimate home owners (note holders). This program is just another outrageous moral hazzard.
stiffing the legitimate home owners (note holders).
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Interesting choice of words ,, the notes have been destroyed in the securiization process , the owners of the (unsecured) debt are “certificate owners” and have collection rights only,, and by the way ,, the PSA governing the SPV in every case I have examined the servicer is responsible for making the certificate owners whole each month,, they are required to foreward the expected income stream payments regardless of whether or not they actually collect the payments... That is why they generally tell homeowners to purposefully default on 3 or more payments to “qualify for a loan mod” ,, the real reason is to give the trustee a reason to swap the loan out of the pool and collect on insurance they have against default.