While foreclosure statistics continue to reflect the desperation of the average American homeowner, the Obama administration is pushing new initiatives aimed at providing more resources for borrowers who need assistance to stay current with their mortgages or avoid property repossession. The Treasury Department says it will expect increased transparency and accountability on the part of loan servicers who have been consistently accused of foot dragging.

The latest move is to jumpstart a $75 billion loan modification program that has had lackluster results. When it was first rolled out it was meant to help four million delinquent homeowners but it has only helped a fraction of those people to accomplish successful modifications to their loans. Those who do qualify for loan modification can get lower interest rates and monthly payments for up to five years. That should give many homeowners a catch to get back on their feet and catch up with payments without worrying about sudden rate hikes on ARM loans.

But loan servicers say they are having trouble getting documents from borrowers, while their customers say that they send in necessary paperwork and then it just gets lost by their lenders. By the time modifications are ready to process, many Americans have lost their homes and been forced into bankruptcy.

The percentage of home loans that were at least one payment behind or already in foreclosure was more than 14 percent recently, according to data from the Mortgage Bankers Association. That is the highest number the organization has ever recorded since it began keeping statistics, and if the situation continues it could create a 2nd wave of foreclosures to take the floor out from under a recovering housing market.

If you are behind on house payments – or headed toward foreclosure – contact your lender right away. If they do not return your calls or respond, visit a free credit counseling service, contact your local Congressional representatives, or – if you can afford it – hire an attorney. Homeowners who force lenders to cooperate get faster results, and if it means saving your family home it is worth the effort.

Similar Posts:

Share