Securitized mortgages rarely renegotiated.

• Position: Homeownership - Brief article

One factor, little-known by borrowers, can play a large role in whether banks are willing to renegotiate mortgages with homeowners who are struggling to meet payments. However, it is a factor that homeowners have no control over. Researchers have found that mortgages owned by lenders were 26% to 36% more likely to be renegotiated than very similar ones that the original lenders sold to other companies, which turned them into securities.

"Homeowners don't have a say in whether their bank sells their mortgage or not, but that can have a significant impact on whether their loan is renegotiated," points out Itzhak Ben-David, coauthor of a study published in the Journal of Financial Economics.

When people get mortgages from lenders such as banks, these lenders can keep the mortgages themselves, or they can sell them to a company like Goldman Sachs, which bundles many thousands of mortgages together into one security offering. It then offer shares of this security to investors. The lender you got the mortgage from still may "service" the loan--meaning it will collect your payments and deal with your paperwork--but it...