Foreclosure Mediation Isn’t Working, Says National Consumer Law Center
This is an article posted by Housingwire.com. I touches on exactly why consumer-based mortgage modification efforts are having dismal results. (The Colorado PBS station recently stated they were getting 10% success results.) See paragraph five. This is pointedly why hiring an attorney will hugely improve the distressed homeowner’s chance of success. A national attorney like the ones I represent will hold your lender’s feet to the fire and ensure they live up to the modification requirements. A missed point here is that as investors buy their way out of the HAMP program, they will become increasingly reluctant to live up to their agreement. Qualified attorneys will alleviate this also. Notice that the star servicer has a whopping 39% modification rate. Compare that to national attorneys success rate of 95%.
Foreclosure Mediation Isn’t Working, Says National Consumer Law Center
By JON PRIOR – September 28, 2009 12:21 PM CST
Mortgage mediation for distressed borrowers, as a requirement prior to foreclosure, is growing more common at national, state and local levels. However, a group representing the pockets of Americans hardest hit by the housing crisis is doubtful these initiatives will do much good in the long run.
Mortgage mediation efforts, where lenders reach out to borrowers in trouble in an attempt to bring loan payments current, suffer from the same lack of industry accountability that haunts voluntary federal mortgage modification programs, according to a new study from the nonprofit National Consumer Law Center (NCLC).
The NCLC says for all of the good these new regulations intend for borrowers, in the end it equals more bark than bite.
The NCLC is a consumer advocacy group representing low-income families. For the latest research, the NCLC reviewed 25 foreclosure mediation programs in 14 states and warned that the expectations these programs encourage could be misleading.
Researchers also found that the existing programs fail to impose significant obligations on mortgage servicers.
The programs do not require servicers to substantiate a right to foreclose, and they do not mandate an analysis of alternatives to loan modifications. Many of the programs set procedural barriers that keep some homeowners from participating, according to the study.
But the 57 servicers participating in the Home Affordable Modification Program (HAMP) are on track to the meet the Administration’s goal of reaching 3m to 4m homeowners over the next three years, according the US Treasury Department’s latest performance report of the participating servicers.
HAMP provides cap incentives to servicers for the modification of loans in danger of foreclosure, and the Treasury adjusts those caps based on performance. The Treasury said in its latest report that 360,000 trial modification are underway, led by Saxon Mortgage Services, which started trials for 39% of its eligible delinquency portfolio.
Read it here
