But I'm a little confused about how Salmon proposes that the bank here wasn't acting in its own best interest. If he means that its actions led to a judge awarding the home to the borrower, and that screws the bank, well that's true. But I seriously doubt that the bank believed that its actions would lead to that outcome. Otherwise, it likely would have thought twice. In reality, this more likely serves as situation where an activist judge was tired of banks not working to help homeowners, so ruled in the borrower's favor, rather than actually pay attention to what the mortgage contract said and uphold it.
Had the mortgage contract been upheld, then Indymac would have repossessed the home, as planned. Clearly, that's the outcome it expected its actions to bring. If Salmon means to speculate that the bank would have been better off if it had accepted one of Ms. Yaho-Horoski's modification alternatives than force her to foreclose, then I'm not sure I can agree. Frankly, I'd have to remain agnostic on the question, because I don't have the same information that the bank was privy to in order to make that determination.
For whatever reason, it didn't like the modification options Ms. Yaho-Horoski presented. Maybe it believed that they all had far more risk than just foreclosing and settling for whatever price it could obtain in the battered housing market. So the bank deemed foreclosure its best option.
Or as some have speculated, maybe banks like Indymac won't give anyone modifications because the action of even considering all mortgages for modification is more costly than just foreclosing on everyone. Since no bank has a 100% foreclosure rate, I find that unlikely, but I've heard that argument. Even if it is the case, then it's still acting in what it believes is its best interest.
I also wonder -- what other motivation could the bank have had other than its own interest here? I mean, you can say that maybe Indymac is just pure evil and wants everyone, including itself, to lose. But that seems a tad far-fetched.
Now Salmon and I certainly would agree that Indymac took some rather awful methods in attempting to get to its desired end. But that's different from saying that Indymac didn't think it was acting in its own best interest. If anything, I think that this case shows just how far banks or mortgage companies will go in order to try to secure their desired end. Here, Indymac actually went too far and angered a judge, so that the worst possible end resulted. But that clearly wasn't Indymac's intent, just its miscalculation.
This article available online at: