Susan Saulny, a New York Times reporter, recently interviewed me to inquire about why mortgage companies are refusing to foreclose on properties when a debtor does not pay the mortgage payment.
I explained to Susan that mortgage companies are abandoning homes left and right instead of choosing to foreclose on the property. Yes that sentence was not a typo. I explained to her that the mortgage companies are the ones walking away and not the debtors.
This concept is very hard to wrap one's mind around because why would the mortgage companies walk away from a property? They lent money to the borrower to purchase a home and now the borrower is not making payments. It only seems logical that the mortgage company would want their property back. In today's economy logic does not enter the equation.
In a previous article on this site, Is The Credit Card Industry Redlining? I wrote about actions by American Express where customer's credit limits were lowered based upon where they shopped.
In a New York Times article, "American Express Kept a (Very) Watchful Eye on Charges",...
After helping to foster the explosive growth of consumer debt in recent years, credit card companies are realizing that some hard-pressed Americans will not be able to pay their bills as the economy deteriorates.
So lenders and their collectors are rushing to round up what money they can before things get worse, even if that means forgiving part of some borrowers’ debts.