by Karen Weise, ProPublica
In May, we first reported on how disorganization at banks caused homeowners to lose their homes while still in the loan modification process — something that’s not supposed to happen under the rules of the government loan modification program. Treasury officials said they were working to fix the problem, but nine months later the practice is prevalent, according to a new report.For the report, the National Consumer Law Center and the National Association of Consumer Advocates surveyed 96 attorneys, representing over 2,500 homeowners. Nearly every attorney said that they had clients whose banks tried to foreclose while the homeowner was still negotiating a loan modification. Half of the attorneys said they had represented more than 20 homeowners in that situation. (These findings echo a similar survey that we reported on in July, where nearly two-thirds of California housing counselors surveyed said they had at least one client whose home was foreclosed on during the modification process.)
This is a companion discussion topic for the original entry at https://talkingpointsmemo.com/?p=116817