Real Estate

Effort to save Homes in Foreclosure is Having Little impact

Some of you have realized his by talking with your bank or heard others around you tell you their horror stories. The Foreclosure Relief Programs either set up by the government or voluntarily by banks has had little affect to help those in need.

This article highlights and shares some of the frustration homeowners are having trying to work out a loan modification or other help.

Flaws plague foreclosure relief program

Latest effort to save homes having only limited impact

The HAMP guidelines call on lenders to try to modify every mortgage before moving to foreclosure. But
that’s not what’s happening, according to a survey of more than 100 housing attorneys by the National
Association of Consumer Advocates. “Ninety-five percent (of the attorneys surveyed) said
that a (mortgage) servicer had attempted to proceed with a foreclosure sale without a proper HAMP
review,” said Ellen Taverna, a NACA associate who conducted the survey. Nearly half the housing
attorneys said they have represented 10 or more households who had faced a foreclosure without a
proper loan review; 14 percent said they have represented 50 or more households in that situation.
So far, the HAMP program hasn’t slowed a record pace of foreclosures. Some 2.8 million households
were threatened with foreclosure last year, according to RealtyTrac, a Web site that tracks foreclosure filing
nationwide. The company estimates the figure could rise to 3.5 million this year as payments reset on a
wave of “pay option” adjustable-rate mortgages, which came with an especially nasty feature called
“negative amortization.” Simply put, these homeowners face the prospect of a rising mortgage
balance – leaving them owing more than they originally borrowed.
Frustrated by the lack of progress with loan modifications, some homeowners are giving up and
choosing “strategic default” — simply walking away from their homes. Those defaults, and the ongoing

wave of foreclosures, will continue to weigh on the housing market, holding back the nascent economic recovery.


By Diego Loya

Diego Loya is a Realtor - Broker at Home Living Real Estate Brokerage, a Orange County full services real estate company. Over the past 12 years, Diego has helped homeowners sell and buy their homes. He's loves educating and empowering real estate consumers. You can find him on Google, Facebook and Twitter.

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