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White House Meets With Mortgage Servicers to Discuss Delays and Legal Violations in Loan Modification Program

July 28, 2009

As Santa Ana loan modification attorneys, we are keeping a close eye on the results of a meeting between loan servicers and top Obama Administration officials July 28. Called by a letter that the New York Times called an ultimatum, the meeting is intended to discuss problems with the Making Home Affordable loan modification plan. According to an analysis by the Center for American Progress, representatives from mortgage servicing companies will meet with officials from the departments of Housing and Urban Development and the Treasury to discuss why homeowners are meeting severe obstacles when they try to take advantage of the program. Making Home Affordable gives lenders financial incentives to grant loan modifications to homeowners whose income qualifies them; the administration had projected that 3 to 4 million homeowners could benefit.

In reality, the analysis said, there have been only 160,000 trial modifications this year under the program, during the same time period when lenders foreclosed on 1.5 million homes. As ABC News noted, it's not just the executive branch that's noticed the problems. After Congressional hearings on the frustrations homeowners have faced, Senator Chris Dodd (D-Conn.) asked the Obama Administration to investigate allegations that servicers have violated federal guidelines by charging homeowners advance fees for loan modifications; incorrectly telling them they must be in default before a modification; starting foreclosures despite the homeowners' participation in the program; and wrongly denying modifications to eligible homeowners.

As Rancho Cucamonga loan modification lawyers, we hear these and other complaints from clients who come to us after their attempts to negotiate their own modifications have met delays, excuses and bureaucratic slowdowns by their servicers. In fact, we strongly suspect that a thorough federal government investigation would turn up evidence showing servicers are not offering meaningful loan modifications simply because they don't want to. As we have noted on this blog before, servicers are nervous about losing money -- and even though a loan modification is cheaper than a foreclosure, tunnel vision or accounting tricks can make foreclosure look more attractive. As a result, millions of homeowners have been endlessly delayed or offered ineffective loan modifications by servicers that could easily afford the personnel and effort necessary for providing real modifications, but prefer to drag out the process for the sake of their balance sheets.

Howard Law LLP offers an alternative through our loan modification practice. Even when homeowners have had no luck on their own, our Lakewood loan modification attorneys can often get through to the lenders -- precisely because we are attorneys. Lenders know that when lawyers call, they could soon face a lawsuit, and that gives them an extra incentive to pay attention. In fact, we will use any evidence of predatory lending when your loan was originated as leverage to get you a fair deal. Our goal is to keep our clients in their homes whenever possible, by aggressively negotiating for a sustainable loan workout that actually lowers their monthly payments.

If you're facing foreclosure and you're frustrated with red tape and nonsense from your lender, you should call Howard Law for help. To schedule a free, confidential consultation, please contact us online or call us toll-free at 1-800-872-5925.