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  • Report: Foreclosure Crisis not Over and Mortgage Servicers are to Blame

    foreclosure1As the foreclosure crisis reportedly subsides, researchers are continuing to look into its causes and long term effects. What they are finding is troubling. Despite the improving economy, and mortgage servicers’ apparent vested interest in helping homeowners get back on track with their mortgage payments, servicers’ are continuing to put up unnecessary roadblocks which prevent delinquent homeowners from getting the help that is available to them.

    According to a report from the California Reinvestment Coalition, which surveyed housing counselors and legal service attorneys, mortgage servicers are prolonging the foreclosure crisis by refusing to abide by rules which were put in place to help homeowners normalize their mortgage situations. The coalition’s Associate Director, Kevin Stein, says that though servicers’ are incentivized, and even required, to provide assistance to underwater homeowners, they continue to engage in practices such as improperly denying homeowners access to such services, and giving homer owners “the run around” as a result of both incompetence and acting in bad faith.

    Lisa Sitkin, Managing Attorney at Housing and Economic Rights Advocates, has seen the situation firsthand and has worked with many of the homeowners who participated in the report. She says that, particularly in the case when a homeowner dies, servicers unnecessarily drag out the process of the helping the survivors assume the mortgage by providing the loved ones of the deceased borrower with incomplete information, or refusing to speak with them at all. Meanwhile, in many cases, the foreclosure process drags on.

    The report offers a stark contrast to many recent articles and declarations that indicate the foreclosure crisis is over. Perhaps the difference between this report and those which cover national foreclosures is that the national reports focus more on numbers of foreclosures across the country, but do not focus on individual stories of those continuing to battle against mortgage servicers.

    For more from the California Reinvestment Coalition, click here.

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