Talk to a Bankruptcy Lawyer Today.
Evening and Weekend Appointments Available.

The Loan Modification Process Does Not Always Halt Foreclosure

Hearings on the foreclosure crisis began this week on Capitol Hill. Banks gave many people across America and in Ohio mortgages they could not afford. Foreclosures became rampant as lenders repossessed homes of people that became delinquent. Allegations of robo-signers have spread across the country.

The federal government created rules for modifying mortgages to help distressed homeowners save their homes from foreclosure. Modifications were previously available for some homeowners who negotiated directly with their mortgage lenders. Now some homeowners that have been approved for a modification have had difficulty stopping the foreclosure steamroller from taking their home.

One woman, reportedly behind in her home loan payments, went through the modification process and gained approval. Bank of America reportedly did not put a halt to the foreclosure until the woman was able to scrape together an extra $500. The payment averted the foreclosure, at least for now.

Bank of America services one out of every five home loans in the country. Critics have condemned Bank of America for making fewer modifications of eligible loans under the federal government's Home Affordable Modification Program.

Only 21 percent of eligible Bank of America mortgagees have received program modifications. That compares to a 44 percent approval rate from Citigroup, a 37 percent approval rate from Wells Fargo and 32 percent for JPMorgan Chase.

Bank of America says that outside investors own many of the mortgages and that creates a dual track. The foreclosure process moves forward during the modification review because the outside investors insist on signing off before a modification is granted.

The financial institution says that their numbers reflect 10 million mortgages the banking giant picked up when it acquired Countrywide Financial in 2008. Bank of America says the 85,000 modifications made under the federal program are more total modifications than any other institution has approved.

Source: New York Times, "Voices of foreclosure Speak Daily About Desperation and Misery," Nelson D. Schwartz, 16 Nov 2010

No Comments

Leave a comment
Comment Information

Contact The Rose Law Office Today For A FREE Initial Consultation

Phone 513-729-7196
Fax 513-621-6402

Office Locations

The Rose Law Office
35 East 7th Street,
Suite 610

Cincinnati, Ohio 45202

Phone: 513-729-7196
Fax: 513-621-6402
Cincinnati Law Office Map

The Rose Law Office
6020 Cheviot Road
Colerain, OH 45247

Phone: 513-729-7196
Fax: 513-621-6402
Colerain Law Office Map