Foreclosure Numbers Win as Lenders Fail to Workout Loans

obama

Foreclosure numbers continue to dominate and win as lenders fail to workout loans amicably. The Obama team introduced a $75 billion plan to bring down the number of foreclosures but progress has been hampered by backlogs and delays in response from lenders. The borrowers are complaining about phone calls being unanswered and wrong details being given by the lenders. Others say that for unknown reasons the lenders are not giving help.

When the plan was envisaged in March 2009 it was hoped that 4 million would benefit from it with the banks modifying the loans and bringing down the monthly payments. Since the plan took off there have come in 190,000 offers for modifications of mortgages according to the Treasury. But during that same period the lenders have initiated foreclosure proceedings against over 1 million defaulters as per the findings of RealtyTrac. 20% of these have either been foreclosed upon or repossessed.

Economist Joel Naroff said, “Some lenders may not be turning (homeowners) down right away because it might be politically easier to push them off and delay. No one will admit they’re doing this.”

In June Senator Jack Reed (Democrat) together with 14 other colleagues sent a note to HUD secretary, Shaun Donovan asking for new measures to be taken to make the lenders respond to the appeals quicker and faster. The letter read, “Of particular concern are homeowners who have been instructed by HUD-approved counselors to contact their (loan) servicers only to be rebuffed or, worse, never even reach their servicer.”

Two of the unfortunate borrowers trying to get modification are Robin and Craig Doyle residing in Woodland Hills in California. They have been trying for a workout since February last. Robin is a freelance writer. She was initially asked to post a letter describing her hardship together with proof of her income and tax papers. She got together a file running into 200 pages. After one month she was told to rearrange the papers as these documents were not current anymore but outdated. On another occasion she was told that her file had by mistake been altogether closed. In yet another instance she was refused help on the ground that her papers had not included fees given to the house association. Robin bemoaned, “I’ve had to resend it four times. It’s making me sick. It’s been five months. I’ve spent hours and hours on this and sleepless nights. It’s foremost on my mind. I look at my beautiful home and wonder if I’ll have it next month.”