The Home Affordable Mortgage Program (HAMP) was supposed to help close to 4 million homeowners across the country save their homes. But as of May only 1 million of those homeowners have received a mortgage modification and the Department of the Treasury places the blame on banks.
When questioned about the lackluster participation in HAMP, the Treasury stated that incompetence on the part of banks were to blame for lack of progress in preventing foreclosure. The original rules of the HAMP program did not require banks to offer loan modifications, but simply set forth guidelines to lenders.
Two states, California and Massachusetts, have passed laws which require lenders to offer mortgage modifications to homeowners before they are allowed to proceed with foreclosure.
Banks fired back saying that they sometimes make mistakes. There have been numerous accounts of homeowners being denied loan modifications even though they are eligible, and “dual-tracking”, where a bank pursues foreclosure while the homeowner is still in modification negotiations. Other problems plague banks such as lost and botched paperwork, time delays and misinformation.
Banks fired back saying that they sometimes make mistakes. There have been numerous accounts of homeowners being denied loan modifications even though they are eligible, and “dual-tracking”, where a bank pursues foreclosure while the homeowner is still in modification negotiations. Other problems plague banks such as lost and botched paperwork, time delays and misinformation.The banks also criticized the Treasury stating that foreclosure prevention programs were difficult to implement because of the rules were constantly changing and inadequately conceived.
A mortgage modification is one of the alternatives to foreclosure as the homeowner has the opportunity to lower their monthly payments and still live in their homes. Banks often favor short sales over modifications.
There are a number of ways to stop foreclosure, and it often takes the expertise of a foreclosure attorney to determine the right option and negotiate with the lender.
