Help with Foreclosure

Posted on April 4th, 2008 by saman

Many homeowners in danger of losing their homes are not getting the promised help from lenders.

Towns and cities are being hit hard by the current housing and lending crisis. Foreclosures and defaults are growing to record levels and municipalities have to deal with the growing tide of properties that are vacant. These municipalities need to deal with the drop in property values and tax revenues.

Lawmakers, lenders and regulators have pledged repeatedly to implement programs that will help homeowners with the current foreclosure crisis. These programs include extending terms, lowering rates, and writing off principal payments. It is being said that lenders are more willing to work with homeowners during this housing crisis but these assertions are not translating into reality.

So far there have been little or no innovations initiated to assist homeowners. The loss- mitigation process has remained the same. Though some lenders are reaching out to lenders and offering help some are not. The help offered is not consistent among lenders.

There are some lenders that are being uncooperative. Some lenders are stubbornly citing established regulations, rules and restrictions. Some are even rerouting calls and losing paperwork. If a homeowner has a lender that is not taking phone calls or responding to their inquiries, the process to try to save a home can drag on for quite some time. Late fees pile up during these times as well.

There are some homeowners who are proactive in contacting their lenders when they find themselves in financial trouble but even these individuals may not get the help they need. A couple in New York State prevented the foreclosure of their home twice but as they face foreclosure for the third time, they are struggling. This couple was proactive and contacted their lender when they were experiencing financial trouble. They completed workout packages and cut down on expenses in order to pay their mortgage. However, as debt piled up and foreclosure was once again on the horizon, they again asked for help. The only thing the lender offered was for them to pay a substantial amount of money for a number of months to catch up. The amount they were asked to pay was beyond their means.

A couple that wanted to keep a home that they had lived in for forty years took out a large mortgage to make home improvements. They were also offered an additional home equity loans. The original payment amount they were quoted did not include insurance and taxes so a mortgage payment of $498 a month jumped to $1250 a month. The couple did not hear from their lenders when they began to have a financial problem. Many lenders are claiming to want to help homeowners but the homeowner ends up in more trouble instead of less.

Consumer advocates have said that the government is faster to help major companies such as Bear Stearns and Wall Street than the homeowner. Consumer advocates also say that there is a lot that the mortgage industry and government can do better when it comes to helping homeowners.