71 - Securitization Not to Blame for Servicer Reluctance to Modify Mortgages
A new study by Federal Reserve researchers found that government initiatives to stem the country's mounting foreclosures are hampered because banks and other lenders in many cases have more financial incentive to let borrowers lose their homes than to work out settlements. ABI Executive Director Sam Gerdano discusses the study Why Don't Lenders Renegotiate More Home Mortgages? Redefaults, Self-Cures, and Securitization with two of the study's authors, Dr. Paul Willen and Dr. Kristopher Gerardi. Willen is a Senior Economist and Policy Advisor in the Research Department of the Federal Reserve Bank of Boston and Gerardi is a research economist and assistant policy adviser in the research department of the Federal Reserve Bank of Atlanta. Please note that the views presented in the study and on the podcast are those of the authors, not official statements by the Federal Reserve.