Real Estate & Property Law
‘Huge Disconnect’: Banks Say They Work With Borrowers, But May Not
Posted Feb 27, 2008, 11:34 am CDT
By Martha Neil
One way to resolve the current mortgage meltdown is for lenders to work with borrowers and modify their home loans to make them affordable. This can be in the lender's own interest, because foreclosing, especially in the current housing market, is expensive and likely to result in a lowball resale price.
But although lenders say they are ready to work with borrowers, the reality is they often don't, according to housing advocates. One reason why: banks no longer own many of the mortgages they made, and the investor pools that purchased the loans can be difficult to track down and persuade to modify them, reports Reuters.
Among housing advocates who say lenders need to try harder to work with borrowers is Kevin Stein of the California Reinvestment Coalition. He cites a "huge disconnect" between bank claims that they do so and the perception among those who attempt to modify loans. The State Foreclosure Prevention Working Group said earlier this month that 70 percent of borrowers who are trying to fend off foreclosure aren't involved in loan modification efforts, according to the news agency.
"Our experience varies greatly from lender to lender and even between individual employees," says Barb Van Kerkhove of the Empire Justice Center in Rochester, N.Y. "It often depends on who answers the phone."
Related Stories
- Alaska Lawmakers Release ‘Troopergate’ Report Criticizing Gov. Sarah Palin
Oct 10, 2008, 08:50 pm CDT - Courts in Chicago Struggle to Protect Domestic Violence Victims
Oct 10, 2008, 06:03 pm CDT - We Won’t Evict Unless You Do Your Job, Illinois Sheriff Tells Lenders
Oct 10, 2008, 11:42 am CDT - Citigroup Abandons Wachovia Bid, but not its Lawsuit
Oct 10, 2008, 08:59 am CDT
Related Topics
Commenting has expired on this post.
Comments
Posted by Elsa Rios - 7 months, 2 weeks, 47 minutes ago
I agree there is huge disconnect, having recently almost gone into foreclosure myself and from my experience working in a NJ foreclosure law firm. Lenders send letters out to borrowers requesting they “contact” them to discuss options for avoiding foreclosure, only to make them jump thru hoops before they can actually talk to a live person. They make it very difficult to call back and follow up on any applications you might submit, and if you are in foreclosure it gets worst because you are ping ponged back and forth between the lender and foreclosure attorney. The servicers who own the loans have to make the loss mitigation process a priority and easier . They should immediately assign a specific workout specialist and actually assist the borrower to reach a viable alternative to foreclosure. Just cutting back on high late fees/ lower PMI rates , adjusting due dates and a shaving a point off the interest rate would help the average buyer to make their payments.