Consumer: foreclosure homes

The big bank servicers basically push the borrowers up against the wall, demanding immediate payment, foreclosure, or some alternative modification scenario. The alternative mod is attractive to the servicers, especially if they tack their late fees or principal forbearance onto the unpaid principal balance. This jacks up their servicer fees, which are a percentage of unpaid principal balance. They get to put the borrower in a less-attractive alternative mod, which has no transparency or safeguards, and could easily be another predatory lending scenario. The private mods are far less generous than HAMP mods, and expose the borrower to a far greater potential for default. As banks have learned how to navigate the HAMP system and use it for their own ends, this has become the default mode. 147,000 borrowers received modifications last month, only 28,000 through HAMP.

This conflicts with the claims from the banks that borrowers in delinquency are “deadbeats” who would surely have to give up their homes no matter what. In fact, these people are desperate to keep those homes, and often find a way to do so, accepting whatever modification they can. And for the most part, they’ve stayed current on those modifications. The point is that a legitimate government program for loan modifications would be successful and not result in mass defaults. As it is, many borrowers get shuffled off into these private modifications, and are probably getting abused by them.

I don’t want to suggest that all borrowers behind on their payments are somehow getting modifications; the data shows that banks are only modifying a small percentage, either through HAMP or private mods. And there are definitely a subset of borrowers who won’t be able to afford mortgage payments of any kind.

The main point is this: banks are justifying their fraudulent foreclosure operations by saying that most borrowers would default anyway. But borrowers who have sought help through HAMP are proving that wrong. They’re either getting a HAMP modification, get pushed into a private modification, or somehow move heaven and earth to pay off the loan. People are extremely attached to their homes and will do what it takes to stay in them, if they get the chance. The big bank servicers foreclosing on them in a grab at short-term profits, helping to sink the economy in the exchange, are not engaging in the inevitable. And the bias toward private mods over the HAMP mods show merely that the servicers aren’t as interested in modifying loans as they are in juicing their profits.

UPDATE: I should add that the most widespread action on delinquent mortgages has been no action at all. Often servicers take over a house in foreclosure without then putting it on the market. This is known as “shadow inventory,” and it’s been growing, up 10 percent in the last year to 2.1 million units, about 1/3 of all unsold housing inventory nationwide.

The fraudulent foreclosure mess is a nightmare for Americans and it's going to cause another major meltdown because of the corruption that is rooted in the actual foreclosure process.

Ellinorianne has a great post up at DKOS called: Foreclosure Fiasco - What to Do for the Homeowners? HELP THEM! She outlines the problems and abuses and then offers some assistance.

People need legal help to keep their homes. And many of those people don't have the means to pay for that help. But there are resources but they need funding.

I started here: Institute for Foreclosure Legal Assistance. The crisis of fraud has grown so large that we have a new kind of legal assistance focussed on just helping people keep their homes.

IFLA Mission Statement and Goals

As the nation's foreclosure epidemic continues to worsen, the Center for Responsible Lending has formed the Institute for Foreclosure Legal Assistance (IFLA) to support groups giving legal representation to families facing foreclosure and financial ruin because of abusive subprime mortgages. The National Association of Consumer Advocates will manage the project, which recognizes that one of the biggest barriers families face to avoid losing their homes is the lack of access to quality legal services.

The Institute, launched with a $15 million grant from investment management firm Paulson & Co. Inc., will provide funding and training to organizations that help homeowners negotiate alternatives to foreclosure. The majority of the funds will be grants to support direct legal assistance to borrowers in 10 or more states to fight foreclosure, predatory lenders and abusive loan servicers. It will do this primarily by providing money to top non-profit legal-aid groups and law school clinics.

The IFLA then lists the many Legal Aid Foundations in various states. They need money to hire more lawyers so they can help people keep their homes.

That's it. Donate to your local Legal Aid Foundation and if you have the legal ability to help, please do. If you know the law, get training to help people keep their homes.

As progressives we have a responsibility to help people stay in their homes, we can help them do so. So I'm asking you to help.

This is a worthy cause. Please help if you can because who will?

http://www.complaintsboard.com/complaints/alpine-payment-systems-c270446.html

Monday, November 29, 2010

foreclosure homes

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