Why don't mortgage lenders lower the rate for...

[donnie_do_dad]

...buyers who face foreclosure due to the bubble burst? I do not understand why a mortage company would forclose on a buyer because of the housing bubble burst without offering a lower rate. The mortage company after forclosure will have to sell the house at a lower price to someone else. They will lose monies doing this, will they not? How can they make more money by forclosing and reselling at a lower price. Who else is going to buy it?

[heyteach]

Some companies HAVE figured that out and do that--the loss mitigation department may make that good call. Others are stubborn and don't understand reality. Yes I know people signed for things they should not have but the situation is widespread and the mortgage companies, etc. made a lot of stupid decisions, so they're not in a good position to hold the mortgagee to the letter of the contract as it can bite their bottom line pretty badly. They also could rework the mortgage and put more on at the end. They've got options.