Call me bitter if you will, but the grilling servicers in the loan industry are receiving on Capitol Hill today are what I call “Just Desserts.”  From Business Week:

Far too few homeowners are getting modification help either in debt forgiveness or reduction in interest rates. Even when loans are modified, the adjustments aren’t sticking and the loan goes bad anyway.

Time and time again I’ve heard people begging for help.  They don’t get the help.  I had one buyer who made a full price offer on a short-sale – it would’ve been short about $5000 for the lender.  The lender refused because they’d prefer a foreclosure and losing $60,000 than an immediate out for a $5000 hit.

And lenders know it!

Deloitte’s David Sisko, who leads the firm’s default management/loss mitigation service business, points out that some servicers are exacerbating the problem by cutting corners. At some point, he says, they’re just going to have to suck up and take a hit on their own profits to help the rest of us get through this deluge of problem loans. “

Let us hope the 25 mortgage servicers in Washington this week speaking with officials from Treasury and Housing and Urban Development can come to a fair solution.  We need one.