Regardless of how reasonable a loan product debtors may have been offered at the time of closing on a house or refinancing, things can quickly go from bad to worse if a predatory loan servicing company is involved.
These companies are contracted by large financial investment banks to collect payments on mortgages and keep track of all of the costs, as well as proceed with a foreclosure if need be. However, their first priority is to maximize the profit of every loan they administer, which can lead to cases of corruption and abuse.
The servicer eats up the equity by imposing miscellaneous fees, and then turns a profit when the house is sold on the market after a foreclosure sheriff sale. This results in greater, much quicker cash flow for the investors than if the loan was administered without abuse and paid off over time.