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Homeowners Strung Along On Loan Modification Illusion?

Posted By admin || 26-Jan-2011

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The Texas-based EMC Mortgage Corporation is facing a class-action lawsuit accusing them of deceptive practices, illegal fees and manipulation that ultimately forced homeonwers to lose their homes in foreclosure .  The lawsuit filed on behalf of a Yakima homeowner, says the homeowner was strung along on a loan modification "illusion" that lasted four years, ultimately putting her face-to-face with the foreclosure she was trying to avoid.

"You get a promise, usually verbally, that if you follow this plan and make the payments for 3 to 6 months, then you'll get a permanent modification," said attorney Gretchen Obrist. Obrist says the permanent modification never came. Instead, Pacheco received multiple threats of foreclosure while she was making the monthly payments, and followed sudden cancellation of the foreclosure proceedings and offers of new modification plans. According to Obrist, Pacheco was set up in six plans over a four-year period.

"And the important thing to note about these modification plans is that every time there's a new one, there's a new set of fees that are added," said Obrist. Bank of America, Wells Fargo, JP Morgan Chase and other mortgage servicing companies are already facing similar lawsuits in other states.  If it's true that homeowners are being abused through mortgage modifications then it is a true travesty. The mortgage industry has received billions of dollars under the guise of helping homeowners tackle the foreclosure crisis; but instead of fewer foreclosures we are left with unfulfilled promises.  As the lawsuit noted, the mortgage servicers receive cash incentives for signing up homeowners to the mortgage modification program; but if it is found that they are attempting to steal the incentive without providing any real foreclosure prevention help to the homeowner, they need to be severely punished.

(source:  )

Categories: Loans / Mortgages
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