Bank of America, which is the largest mortgage servicer in the nation, has failed to do its part to thwart the foreclosure crisis, according to many homeowner advocacy groups. A report which was recently released, revealed that Bank of America has completed only 630,000 mortgage modifications for homeowners facing foreclosure since January 2008. Furthermore, the report claims that Bank of America services more than 1 million homes facing foreclosure that are eligible for modification under the federal modification program; but only 5.8 percent of those homes facing foreclosure have been put into a modification program. But Bank of America insists that it has done more than its fair share in trying to help homeowners avoid foreclosure.
"Foreclosure is a sad and damaging result for the homeowners; a very costly result for the servicer and mortgage investor; and a detriment to the surrounding community," Bank of America said. "While we cannot avoid foreclosure in some cases, particularly in today's economy, Bank of America considers foreclosure only as a last resort."
But the reality is that foreclosure is not necessarily the last resort for banks who are impatient and uncaring with homeowners struggling financially. What's really happening is that servicers such as Bank of America are often quick to foreclose on properties where it would be profitable for them. Proof of that is in the incentive program offering homeowners (preferably those with equity) cash incentives to voluntarily surrender their homes in lieu of foreclosure. Whether it is voluntary or involuntary, foreclosure still blights communities and drains resources out of cities and neighborhoods. Failure to understand how foreclosure negatively impacts real people, will only facilitate the worsening of this crisis.