States’ Foreclosure Settlement Terms May Backfire, Study Says
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A proposal by state attorneys general to require more mortgage modifications may backfire and add as much as $10 billion a year in costs, according to a study financed in part by loan servicers.
“The biggest concern is that it would not provide any lasting benefits to homeowners and it will have significant unintended consequences that make the housing situation worse,” said Eric J. Higgins, a finance professor at Kansas State University who wrote the report with professors Charles W. Calomiris of Columbia University Graduate School of Business and Joseph R. Mason of Louisiana State University.