Last 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 Attorney Generals want banks to change their processes and stop foreclosure proceedings on homeowners who are seeking loan modifications.
Iowa Attorney General Tom Miller is spearheading this massive investigation and says that loan servicers have to use more resources to review paperwork before determining a homeowner should go into foreclosure. This no doubt arises from the stories of some loan officials arbitrarily choosing who is foreclosed upon, without reading all the paperwork or trying to work out another solution.
Another practice that the attorney generals want stopped is allowing foreclosure proceedings to begin even if the homeowner is already in a trial loan modification program. This system is allowed under the President’s program but it provides unnecessary confusion and stress for the homeowner to receive foreclosure notices after they think they’ve been accepted into a modification program.
State officials also propose that one person should be provided for each homeowner to make the loan modification process smoother and to create an advisory board to oversee and possibly penalize any loan provider who isn’t complying with the rules.
Bank of America has already revamped their foreclosure process after the paperwork scandal and wants to halt foreclosures, although they claim that current contracts are posing a problem.
For more information, read the full story here.
