FedUpUSA

New Survey – Servicers Continue to Wrongfully Initiate Foreclosures

 

“We must eliminate the two-track system in which banks proceed with foreclosures while evaluating borrowers for a loan modification. Homeowners should be properly evaluated for a loan modification before a foreclosure is initiated and that evaluation should be completed before any foreclosure fees are incurred. Servicers must not be allowed to profit from improper fees and unnecessary foreclosure initiation”.

A November 2010 survey by the National Association of Consumer Advocates (NACA) and the National Consumer Law Center (NCLC) demonstrates that mortgage servicers often initiate foreclosure proceedings improperly, either while a homeowner is awaiting a loan modification or due to improper fees or payment processing.

Foreclosure Initiation During the Loan Modification Process Is Still a Substantial Problem

  • Almost 99% of consumer attorneys from 34 states represent homeowners placed in foreclosure while awaiting a loan modification.
  • Over 15% of those respondents represent over 100 households suffering from this situation.
  • Over 65% of the survey respondents stated that they represent more than 10 households who had been placed in foreclosure while awaiting a loan modification.
  • Over 47% of the survey respondents stated that they represent more than 20 households who had been placed in foreclosure while awaiting a loan modification.
  • In total, survey respondents reported representing over 2,500 homeowners placed in foreclosure while awaiting a loan modification.

The survey results demonstrate these practices are widespread.

  • Over half of respondents represent homeowners who were placed into foreclosure due to misapplication of payments.
  • Over half of respondents represent homeowners who were placed into foreclosure due to improper fees (e.g. late fees, broker-price opinions, inspection fees, attorney’s fees and other fees).
  • Over half of respondents represent homeowners who were placed into foreclosure due to force-placed insurance.
  • In total, survey respondents reported representing over 1,200 homeowners who had been placed into foreclosure due to misapplication of payments, improper fees, or force-placed insurance.
  • Over 87% of the respondents represent homeowners who had been placed in foreclosure because the servicer did not properly accept the homeowner’s payments.
  • Almost 90% of the respondents represent homeowners where a mortgage servicer initiated foreclosure proceedings while the homeowner was making payments as previously agreed upon.
  • In total, survey respondents reported representing over 1,800 homeowners who had been placed into foreclosure despite making payments as agreed.

Full report below…

Servicers Continue to Wrongfully Initiate Foreclosures

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