Saturday, February 20, 2010

Does deal with feds encourage foreclosures?

Does deal with feds encourage foreclosures?: "A bank can make a bigger profit by foreclosing on a homeowner rather than modifying the mortgage, according to two California real estate entrepreneurs. They blame a sweetheart deal that a new bank negotiated with the Federal Deposit Insurance Corporation (FDIC).

The California men produced a video that has now gone viral on the internet, outlining a sweetheart deal for billionaire investors who came together to buy out troubled IndyMac Mortgage Services. The newly formed OneWest Bank haggled with the FDIC to buy out IndyMac's mortgages for 70 cents on the dollar, then convinced the feds to cover nearly all their losses with at least 80 cents on the dollar of the original loan values."

The video link is here.

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