According to an article in the Star-Telegram , the Obama administration has pumped up the pressure on mortgage lenders in an effort to curb foreclosures. This week the administration was able to extract a verbal pledge from 23 mortgage company executives promising to enroll 500,000 homeowners facing foreclosure into mortgage loan modification programs.
The article said:
“The sessions came amid concerns that the Obama administration will fall far short of its original goal of helping up to 3 million to 4 million troubled borrowers with modified loans.
As of this week, only about 200,000 borrowers were enrolled in three-month trial loan modifications, out of about 370,000 who were offered modifications by mortgage companies.”
Many housing advocates say that the current mortgage modification process is a bureaucratic nightmare for homeowners facing foreclosure. Many homeowners facing foreclosure are struggling to negotiate mortgage modifications for months on end and many mortgage lenders are engaging in behavior that has been clearly prohibited by the federal government.
“Housing counselors say borrowers are being charged upfront fees and given inaccurate or confusing information about the program. The delays are long and, in some cases, lenders continue the foreclosure process while loans are being reviewed for a modification.”
For homeowners facing foreclosure, upfront fees can be discouraging and in many cases impossible to pay. This is why it is important for homeowners facing foreclosure to explore all of their options, including bankruptcy, while negotiating a mortgage modification.