CRC Report: Mortgage Servicers Most Common Response To Distressed Borrowers? Foreclosure.

I was in Corona, California this week meeting with Moe Bedard and Loan Safe Solutions.  We were talking about the different ways that Loan Safe can help people who are facing serious financial problems due to a toxic mortgage loan.

Are lenders doing enough to help troubled borrowers?

Not according to the California Reinvestment Coalition, which released a report that argued mortgage servicers and lenders are not working with borrowers who need loan modifications in order to keep their homes.

Kevin Stein, CRC associate director who provided analysis on the survey results was quoted in a Housing Wire article as saying:

“With little accountability, obligation, or oversight, home loan servicers are not doing enough to keep borrowers in their homes.  For some borrowers, this may mean that they will be doubly victimized by predatory lending practices on the front end, and now by unhelpful loan servicing practices that lead to foreclosure on the back end. We must work immediately and diligently towards solutions to avoid this result.”

The main theme of the report is summarized well in the first pages of the report and some of the highlights  (the 3rd report in a series of 3 about the topic of the housing crisis) include:

“The first two surveys found that loan servicers were not modifying loans to any significant degree, were not conducting early outreach to borrowers facing rising mortgage payments, and were most likely to foreclose on borrowers.

This third report, The Continuing Chasm between Words and Deeds, focuses on loan counselors’ experiences in April 2008, a time when government officials, industry associations, and individual companies were representing publicly that great strides were being made to help borrowers in distress.

Sadly, after months of public discourse about the growing foreclosure crisis and the need for loan modifications, this new survey demonstrates that while responding agencies do report a modest increase in loan modifications, loan servicers’ failures to meaningfully respond to the crisis continue as follows:

Servicers are not modifying home loans on any scale;

Servicers are not conducting sufficient outreach to borrowers facing rising payments; and

Servicers continue to turn to foreclosure as their most common response to borrowers in distress.”

Servicers continue to turn to foreclosure as their most common response to borrowers in distress?

No wonder Moe Bedard and his company are growing faster than they can keep up with!  More and more people are learning what the term “Loan Modification” means and are turning to reputable legal firms who can help them.

If you are a homeowner in distress, let me know and I would be happy to point you in the direction of someone who can help.

Way to go Moe!

Tagged as: Foreclosure Options