Servicers can make $10,000 to foreclosure sale $200k home per BusinessWeek.
Article: "Mortgage Servicer Profits May Threaten Obama Housing Programs"
Once a loan is 90 days or more overdue, servicers charge processing and foreclosure fees along with markups for attorneys, appraisers and other services. Thatís on top of monthly late fees that can run as high as 5 percent of the mortgage payment. A foreclosure on a $200,000 mortgage may result in $10,000 or more of income for servicers, who get paid before mortgage investors.
Servicers can easily make 10 times any of the government stipends being offered by simply foreclosing on the house. The mortgage investors will take a loss from a foreclosure or a short sale, but not the servicers who are first in line to be paid from the proceeds of the sale.
Servicers love loans that are in default for an extended period of time. They are cash cows.
Long article at
Mortgage Servicer Profits May Threaten Obama Housing Programs - BusinessWeek