Homeowners Struggle to Avoid Bank Foreclosure House Sale

by on Stop Foreclosures

Many distressed homeowners in Sonoma County, California are feeling frustrated about the difficulty of finding help to save their properties from bank foreclosure house sale. And a number of them are questioning why banks that receive millions of bailout funds are not doing their best to help them save their properties from foreclosures.

The desperation to save their homes from foreclosures and not knowing who to turn to for help have driven many homeowners to unknowingly put their trust on the hands of fraudulent foreclosure prevention companies.

Homeowners who have been waiting for months to hear anything from their lenders over their loan modification applications are questioning the effectiveness of the $75 billion federal Home Affordable Modification Program (HAMP) which is designed to give mortgage relief to financially-strapped homeowners who lost their jobs, facing an increase in mortgage payments and have seen their income reduced.

According to housing advocates, the HAMP is an improvement from the previous administration’s programs that failed to reduce the number of bank foreclosure house sale. Under the program, banks are provided with incentives to motivate them to lower their interest rates, extend mortgage terms or delay principal loan payments.

Additionally, the program stated that borrowers who remain current on their modified loans will receive incentives to reduce their mortgage balances.

Industry analysts said that despite the efforts of the federal government to make the HAMP work to help troubled homeowners, foreclosure remains unabated, ruining hundreds and thousands of lives, pulling down home values and prices and devastating neighborhoods.

Analysts said that the federal subsidies were not enough to encourage many lenders to do their share in helping alleviate the foreclosure problem by helping distressed homeowners save their houses from foreclosures.

In Sonoma County, about 100 notices of defaults were issued by lenders every week for homeowners who defaulted on their loan payments for the first six months of this year. Federal officials said that while homeowners are having their troubled loans reworked, banks should boost their loan modification activity. Market data showed that 19 percent of about 3 million eligible homeowners across the United States were able to modify their loans with the help of their lenders.

Banks claimed that they have been intensifying their efforts to help troubled borrowers avoid bank foreclosure house sale, including hiring more employees and working with more borrowers who are at risk of defaulting.