They say they do. The government has provided $75 billion
in taxpayer money and told them to. But many of them are
stalling because helping troubled homeowners is a financial
conflict of interest for them.

When the "Making Home Affordable" program was announced,
financially strapped homeowners expected to find some
relief. And some did get relief in the form of a refinanced
loan or a mortgage loan modification.

However, many others are finding that their mortgage loan
servicer is putting them off.

Mortgage companies are paid to service mortgage loans and
they collect a percentage of the value of the loans they
service. They're paid the fee by the investor whether the
homeowners make their payments or not.

Consumers who are delinquent on their loans are the least
likely to find help, because mortgage loan servicers also
collect fees of up to 6% of the payment amount each time a
payment is late. Thus they aren't in any hurry to help get
those loans current.

The consumers and the investors are the ones who suffer,
while the loan servicers reap huge profits.

On the surface, the "Making Home Affordable" program seems
to be an incentive for loan servicers to help consumers.
They receive $1,000 at the time they modify a loan, and
another $1,000 per year for the following 3 years.

However, when a home goes into foreclosure, the fees can
far outweigh that paltry $4,000.

They've been collecting late fees from the consumer until
the mortgage went into permanent default. Once it's in
foreclosure, they begin collecting even better fees from
the investors. Taking possession of a house, checking the
title, arranging for maintenance, ordering appraisals, and
other tasks all carry fees. Further, a mortgage servicer is
free to use the suppliers of his or her choice for legal
work, title reports, and insurance policies.

This work can be funneled to businesses that the loan
servicer either owns or has an interest in. Once again, the
profits grow.

The monthly management fees may be one reason why mortgage
loan servicers reject offer so routinely, and why they
often list foreclosed homes at prices higher than their
real estate professionals suggest. The longer a house stays
on the books the longer they collect from the investors.

So - while mortgage loan servicers are morally (and
legally) obligated to do the best thing for the investors,
and they claim to want to do the best thing for homeowners
in trouble, they seem to be playing the "collect money
game" from every angle.

When I was a kid they used to call that "Playing both sides
against the middle."