Lawmakers Call for Urgent Bank Foreclosed Homes Prevention

by Peter Vernon on Foreclosure Help

About 17 Democratic lawmakers have issued an urgent call for measures to stave off the number of bank foreclosed homes in the country. Congresswoman Doris O. Matsui called on the Obama Administration to act quickly to address the growing housing crisis in the country today.

She initiated the call in a letter signed by several of her colleagues in Congress and sent to the U.S. Housing and Urban Development (HUD). The letter is written to call attention to the lack of response from mortgage services to help distressed homeowners.

Also, the lawmakers wanted to point out the need to make sure that the Obama Administration’s Making Home Affordable program will be able to help responsible borrowers who are having difficulty making their mortgage payments and are at risk of losing their properties to foreclosures.

Matsui has urged the federal government to use all the available resources to make sure that distressed borrowers are properly helped by lenders. She added that the Administration’s program is important to provide relief and help to responsible homeowners.

Under the federal program, an array of incentives is being offered to mortgage lenders to encourage them to modify troubled loans to make them affordable to pay by distressed homeowners.

But a report released by the U.S. Department of Treasury showed that only about 9 percent of the target 4 million eligible borrowers under the program had their loans altered into more sustainable and affordable terms.

In July, foreclosure activity across the country rose by 7 percent compared with June and 32 percent from the same month in 2008. In the first seven months of this year, filings of default, auctions or bank repossessions reached 2.3 million.

Meanwhile, Matsui’s letter cited a National Foreclosure Mitigation Counseling Program report which stated that homeowners who were able to connect with their lenders waited for as long as 2 months for a response to their loan modification request.

She and her colleagues urged the Obama Administration to encourage mortgage lenders to intensify their loan modification efforts, to improve responsiveness to homeowners’ assistance request and expand the coverage of existing assistance programs for homeowners.