No End to Bank Foreclosure Listings

by Peter Vernon on Foreclosure Crisis

A panel of consumer advocates and government officials told participants at the National Association of Real Estate Editors conference not to expect an end to bank forclosure listings anytime soon.

Panelists agreed that whatever progress made by the Obama Administration’s foreclosure prevention programs, such as refinancing and loan modification, will be derailed by recession, re-defaults and misinformation disseminated by for-profit repossession prevention firms.

Deputy Treasury Secretary Seth Wheeler said that the loan modification program failed to perform as expected, with only 75 percent of mortgage servicers participating. He said that only 150,000 trial loan modifications have been finalized while thousands are still in danger of being placed on bank foreclosure listings as mortgage servicers struggle to boost the number of their staff and training.

Office of the Comptroller of the Currency Chief of Staff John Walsh said that refinancing also failed to perform as expected because of worsening economic conditions. He explained that the drastic decline in home prices and increasing unemployment rate are starting to take their toll on homeowners.

According to market data, a 52 percent failure rate was posted for mortgage modifications.

Meanwhile, National Community Reinvestment Coalition executive vice president David Berenbaum urged the media to refrain from running advertisements by for-profit foreclosure prevention companies that charge an average of $2,900 to homeowners for poor advice.

He cited as examples advises not to pay mortgage loans or contact lenders. He said that counselors approved by the Department of Housing and Urban Development (HUD) are available to provide help to distressed homeowners for free.

Some organizations that may help troubled homeowners how to avoid placing their properties on bank foreclosure listings are NeighborWorks America, a nonprofit, congressionally chartered network of over 240 affordable housing and community development organizations.

NeighborWorks Chief Executive Officer Kenneth D. Wade pointed out the need for transparency on results. He said that more information is needed about distressed homeowners who are receiving assistance to determine what is working and what is not.

He said that if the new programs designed to help troubled homeowners avoid placing their properties on bank foreclosure listings can keep pace with changes brought about by the housing problems in the country, then they have better chances of working.