It used to be true that so long as you made your mortgage payments, your house would be safe from foreclosure. Today, in the midst of this housing crisis, some homeowners who were granted mortgage modifications, are still losing their homes due to bank miscommunication and lost paperwork.
Lost paperwork is leading homeowners into foreclosure? Absolutely. Here are a few examples from a Wall Street Journal article:
1. Stephanie Lulko was in a trial loan under the Home Affordable Modification Program (HAMP) and made six $767-a-month payments. Her bank then said they have no record of the loan and would begin foreclosure proceedings unless she paid them $4,091.94. Then the bank said she earned too much money to be granted a permanent loan modification, despite the fact that she’s been unemployed since her temporary Census Bureau job ended.
2. Lindsay Farnsworth’s bank “inadvertently verbally reviewed” her loan modification application so she started making smaller payments. Later they changed their tune and said she was not approved because her mortgage was funded through the Federal Housing Administration.
3. Luis Alvarez’ mortgage provider lost his paperwork for a modification eight times and his home is due to be sold at auction soon, despite the fact that he made each modified payment on time for the last eight months.
Treasury officials don’t track how frequently errors occur with documentation on home loans submitted to more than 2,500 financial institutions and servicers empowered by the U.S. government to grant and reject HAMP requests. Nor do they track how many of the disputed applications actually led to permanent modification or foreclosure.
This comedy of errors just adds to the insurmountable stress of these homeowners who are trying to avoid foreclosure.
Trackbacks/Pingbacks
[…] week we told you about some of the mistakes that loan providers made which forced thousands of homeowners into the foreclosure process by mistake. Now all 50 State […]