All Foreclosures to Require Servicing?

Bloomberg has an article explaining how the Obama Administration may ban all residential foreclosures unless lenders and their servicers make maximum efforts to verify that the mortgage facing foreclosure has been screened and rejected as eligible for modification under the federal government mortgage modification program called HAMP.

To date,  lenders have been able  to commence foreclosure actions even if a mortgage has not been submitted for HAMP eligibility. Further, foreclosures can currently proceed while borrowers are under review for HAMP eligibility or even participating in a trial modification.

The affect of this proposal will be to reduce the supply of REO on the market and increase REO prices even further.

February 23, 2010 – Bloomberg.com