Homeowners Still Enduring Foreclosures With Little Help From Banks

MISSION VIEJO, Calif., April 21, 2011 /PRNewswire/ -- As the mortgage foreclosure crisis continues virtually unabated, there is little help coming from Congress for struggling homeowners. Despite giving the banks trillions of dollars in bailouts and interest free loans, the Obama HAMP program, which launched in 2009 and was expected to help 3-4 million homeowners, has a little over 500,000 borrowers who are in active permanent modification according to the U.S. Treasury Department. Statistics from Treasury show that close to 75% of people who apply for a HAMP modifications are denied by their bank.  

Despite clear eligibility guidelines establish by Treasury, many borrowers find that banks lose their paperwork or never render a decision, adding to their frustration. Struggling borrowers endure unfulfilled promises of help for months or even years, while the banks simultaneously try to foreclose on their home. Others face trial modifications that exceed the 3 month "Trial Period" required by HAMP guidelines, in many of these cases banks will not convert them into permanent modifications. The problem, critics say, is that mortgage servicers face no penalties for violating program guidelines, because HAMP is voluntary.   According to Prentiss Cox, a law professor at the University of Minnesota. "The fundamental flaw from the beginning was presuming the people who caused the mortgage crisis were somehow going to act in the public interest." "What was needed was, We just bailed you out with a trillion dollars, and in return, we're going to hit you in the head with a two-by-four if you don't [act in the public interest]," said Professor Cox.

We spoke to Robert G. Scurrah, Senior Attorney at CDA Law Center in Mission Viejo, California, who was celebrating a Ribbon Cutting and the modification of over 2,000 loans over the past three years at his new offices in Mission Viejo, California, who said: "We have found that lender abuses of the HAMP program have caused significant damage in our community.   Each new foreclosure not only displaces a local family, but erodes our tax base and further reduces property values in a time that homeowners can least afford it.  Moreover, most clients who retain our firm to achieve their modification in a negotiation with their bank, have tried by themselves to modify their loans for months or even years without success, despite being told by our government that all they had to do was 'call their bank for help'.  Borrowers get strung along needlessly by banks, while more missed payments or partial "trial payments" keep piling up, causing the borrower's arrearage to be so large, that it falls outside of investor guidelines to modify.  This in turn leads to the home being foreclosed upon. The banks purposefully don't disclose that HAMP 'trial payments' are not applied towards a borrower's delinquency, and only a permanent modification will stop the foreclosure process."  

Mayor Dave Leckness of Mission Viejo, Martin Payne District Representative for Senator Mimi Walters, Steven Lamotte, District Representative for Assemblywoman Diane Harkey, Jordan Gonzales Field Representative to Assemblyman Jeff Miller, and the South Orange County Chamber of Commerce were at  CDA Law Center participating in the dedication their new offices while celebrating saving over 2,000 homes from foreclosure. All of our elected officials say their offices receive numerous calls from constituents, complaining about the modification abuses by the banks.

Borrowers also need to beware of the many scammers peddling Forensic Loan Audits, out-of-state attorneys, non-lawyer loan modification companies, and pay-up-front scams that are in violation of both California's SB-94 and the Federal Trade Commission's Final MARS Rule. Consumers need to even be wary of some California attorneys, as noted in the recent Fraud Alerts from the Department of Real Estate and the California BAR regarding Mass Joinder lawsuits. Consumer Advocates advise borrowers to fully research any company or firm they hire to avoid falling victim to a scam or predatory individuals, as being diligent will help prevent desperate homeowners from being scammed by predatory companies or individuals.

"Consumers do not know where to turn for reliable ethical help," says attorney Robert Scurrah.  "CDA Law Center has achieved loan modifications for thousands of our clients, despite some of being denied 6 or 7 times by their bank before coming to us. It's a difficult process that most borrowers generally do not have the financial background to fully understand, and they often take advice from their banks often to their detriment."  

Approximately seven million mortgages in the United States are currently in the "late payment" phase. This is a delinquency rate over eight percent of all mortgages. Over 30% of all mortgages currently in a foreclosure process are over 24 months delinquent (source: Foreclosure Backlog Rises Aid Falls 3/30/11 HousingPredictor).  The S&P/Case-Shiller index of property prices says that property prices in 20 major American cities dropped 3.1% in January , 2011. According to RealtyTac, "foreclosure filings will jump 20% this year, making 2011 the potential peak in the foreclosure crisis."

If you would like more information on this topic or to schedule a prospective client interview with Robert G. Scurrah, Senior Attorney for CDA Law Center located in Mission Viejo California, please call Bill Baskin at 949-379-8008 or email Bill at [email protected]

Contact: Bill Baskin
Tel: 949-379-8008
Email: [email protected]

SOURCE CDA Law Center