This video is a bit dated but it is an accurate representation of how these purchases are generally sold and it shows why most servicers and "owners" prefer to foreclose rather than modify. In addition to profit margins they are also incentivized to foreclose because they understand that they don't have legal standing to claim the asset and if they modify the original note they still leave that elephant standing in the middle of the living room who could potentially crush their new flat screens and sofas they purchase with ill gotten gains. By pursuing foreclosure they eliminate the potential of a legal standing issue and generate greater revenue. It's good to be the king!
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