Homeowners Hope for Easier and More Streamlined Modification Rules as Result of Foreclosure Probe | RISMedia
Homeowners Hope for Easier and More Streamlined Modification Rules as Result of Foreclosure Probe
By Rick Rothacker Print Article
RISMEDIA, November 12, 2010—(MCT)—Union County, N.C., homeowner Barry Lancett signed two agreements with a national lender this year to modify the terms of his mortgage but still received a disturbing piece of paperwork: a foreclosure notice. “A deputy comes to your door and delivers it in front of the community,” said Lancett, who later avoided foreclosure but is still dealing with lingering issues. “It was humiliating, to say the least.”
His experience is one of the biggest frustrations for struggling homeowners—getting hit with a foreclosure proceeding at the same time a loan modification is being worked out with a bank.
Recent laws and regulations in North Carolina are supposed to prevent this, but officials say they’re still getting complaints from consumers. Now it’s an issue coming under scrutiny from attorneys general investigating allegations that lenders mishandled foreclosure-related paperwork.
“This is of great concern to me because it’s important homeowners have a fair chance to keep their home,” North Carolina Attorney General Roy Cooper said in an interview. One of his colleagues in the probe, Arizona Attorney General Terry Goddard, recently said he was most angry about “simultaneous modifications and foreclosures.”
One possible outcome of their investigation may be pledges by banks to improve their loan modification efforts. These programs strive to lower payments for struggling borrowers by reducing interest rates or even principal owed.
There is no point in the loan modification process if the banks aren’t serious about actually creating them. Also the left hand needs to know what the right hand is doing. We’ve had banks contact us about doing short sales on listings for which we were already negotiating short sales. We’ve had clients who were in trial loan modifications for months and months longer than they should have been and couldn’t reach anyone at the banks who could help them figure out what was happening. And we have clients who have loans that they haven’t made payments on for over 2 years and the bank hasn’t even batted and eyelash. Crazy and convoluted. Changes towards more efficiency need to be made to move on past these difficult times.