HuffPO-

We may question the need for 17 brands of dishwashing detergent, but giving consumers choices is an excellent check against many types of harmful behavior of companies that make and sell products.

Sell pet food that kills cats and dogs, manufacture a pickup truck with an exploding gas tank, or even try to spin off your popular DVD-by-mail business, and customers will flee.

“This is the classic market response,” said Katherine Porter, a consumer law professor at the University of California. “Consumers vote with their feet.”

But when it comes to buying a home, these market forces are largely neutralized. That’s because debt also has feet. These days home loans, especially loans in default or otherwise in distress, get traded around more often than a mid-career relief pitcher. The lender that makes the loan may sell it to an investor, like Fannie Mae and Freddie Mac, or another bank. Sometimes the original lender gets bought out by another bank and the loan is transferred.

For homeowners who remain current on their payments and can avoid financial distress, it rarely matters who owns or services their home loan. But when times get tough, that changes.

[HUFFINGTON POST]

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