Help Distressed Homeowners - 10-Point Plan to Improve the Loan Modification Process
Help Distressed Homeowners - 10-Point Plan to Improve the Loan Modification Process
The Issue
Mortgage and foreclosure fraud are rampant and pervasive in the United States. Distressed homeowners are inadequately protected under predatory lending and loan servicing policies. To more fairly balance the needs of loan servicers and the protection of homeowners, these ten (10) policies should be implemented and enforced by the appropriate regulatory agencies.
1. Loan servicers should accept and properly apply partial payments of overdue mortgage accounts.
2. Efforts must be made and enforced to ensure that homeowners are able to reliably reach and/or obtain responses to their inquiries of loan servicers.
3. Loan modifications must be reviewed in a timely manner, preferably with a pre-defined time limit.
4. “Three Month Trial Periods” should be accurately identified to homeowners as to whether or not the trial period is related to a HAMP loan modification or the loan servicer’s in-house loan modification.
5. “Three Month Trial Periods” should not be extended, except upon homeowner’s request.
6. Pending foreclosure cases should be promptly dismissed upon the initiation of any loan modification “Trial Period.”
7. Truth-in-Lending Disclosures and all other such disclosures and settlement statements currently required of mortgage lenders should be provided to homeowners before the initiation of any “Trial Period.” This would allow homeowners to make an informed decision regarding the financial suitability of the future loan modification, while still allowing loan servicers to rescind such agreements upon the failure of the homeowner to successfully complete the “Trial Period.”
8. In a pending foreclosure proceeding, no auction date should be set before a loan modification application has been approved or denied.
9. The right of a homeowner to sell the property should not be restricted during foreclosure or loan modification review.
10. All regulations and laws applying to consumer loans, such as RESPA and TILA, must also fairly apply to loan modifications. If first mortgage and refinanced mortgages are subject to such regulations, why are loan modifications not?
The Issue
Mortgage and foreclosure fraud are rampant and pervasive in the United States. Distressed homeowners are inadequately protected under predatory lending and loan servicing policies. To more fairly balance the needs of loan servicers and the protection of homeowners, these ten (10) policies should be implemented and enforced by the appropriate regulatory agencies.
1. Loan servicers should accept and properly apply partial payments of overdue mortgage accounts.
2. Efforts must be made and enforced to ensure that homeowners are able to reliably reach and/or obtain responses to their inquiries of loan servicers.
3. Loan modifications must be reviewed in a timely manner, preferably with a pre-defined time limit.
4. “Three Month Trial Periods” should be accurately identified to homeowners as to whether or not the trial period is related to a HAMP loan modification or the loan servicer’s in-house loan modification.
5. “Three Month Trial Periods” should not be extended, except upon homeowner’s request.
6. Pending foreclosure cases should be promptly dismissed upon the initiation of any loan modification “Trial Period.”
7. Truth-in-Lending Disclosures and all other such disclosures and settlement statements currently required of mortgage lenders should be provided to homeowners before the initiation of any “Trial Period.” This would allow homeowners to make an informed decision regarding the financial suitability of the future loan modification, while still allowing loan servicers to rescind such agreements upon the failure of the homeowner to successfully complete the “Trial Period.”
8. In a pending foreclosure proceeding, no auction date should be set before a loan modification application has been approved or denied.
9. The right of a homeowner to sell the property should not be restricted during foreclosure or loan modification review.
10. All regulations and laws applying to consumer loans, such as RESPA and TILA, must also fairly apply to loan modifications. If first mortgage and refinanced mortgages are subject to such regulations, why are loan modifications not?
Petition Closed
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Petition created on March 28, 2011