Published on:

Home Loan Modification Programs a Failure and Lead to Long Island Foreclosures

The government for the last few years has gone out of its way to create programs designed to help Long Island homeowners get help if their house was in danger of going into foreclosure.

Sadly, those programs were designed without teeth and did little to force banks into considering using them. Therefore, many Americans were deceived into thinking they could get a loan modification and ended up in a New York foreclosure with seemingly little way out.Homeowners have rights and they must be upheld. This has been even more of an issue in recent years as the country’s big banks have trampled upon them in the pursuit of taking away people’s houses under false pretenses. Bank officials have ordered workers to falsify loan documentation, sign paperwork without checking for accuracy and foreclose on houses while homeowners are attempting to re-work a loan.

A recent Reuters article suggests that the problems with loan modifications have gone a long way toward hampering our country’s real estate recovery. There are millions of foreclosures nationwide and people every day are fighting to save their homes.

One way to defend against foreclosure is pointing out the various problems banks have had in violating homeowners’ rights along the way. The issue of robo-signing has been a big issue throughout the foreclosure mess. This is where companies pay outside mortgage servicers to process paperwork in foreclosure cases.

That is perfectly legal, but what was unlawful was when these mortgage servicers began signing documents with false notaries and signing as bank officials who never actually saw the documents to verify them for accuracy. These documents were the basis for millions of foreclosures that have already taken place.

While it was robo-signing that spurred all 50 states attorneys to begin investigations and launch lawsuits and cause the banks to halt foreclosures for nearly a year, there have been examples that it is still going on.

Other investigations have found that bank officials ordered employees to alter foreclosure paperwork, backdate information, write up inaccurate information on documents and otherwise falsify documentation in order to have the necessary paperwork to file a foreclosure.

The banks relied on this falsified paperwork to take away people’s homes. But as time has gone by, judges throughout the country have become leery of the banks and their work, often finding in favor of homeowners who have stopped paying because banks can’t prove who legally owns the house or they have been found guilty of misdeeds.

The Reuters article looks into the “bureaucratic nightmare” that homeowners endure if they try to modify their loan. Many homeowners have told their stories to the news media where they are in negotiations with a bank only to find out that another bank department has started the foreclosure process or denied them because the homeowner didn’t send in paperwork they actually did send in or some other manufactured error.

Banks have made small efforts to help homeowners by having one-day fairs where struggling homeowners — 1 in 12 mortgages is delinquent — or setting up centers for homeowners. But without those minor efforts, homeowners largely are left to the bank’s graces to work out their problems.

The Law Offices of Ira S. Newman provides foreclosure defense in New York City, Long Island, Great Neck and throughout the area. Call 516-487-7375 or contact us through the website.

Additional Resources:

Modification blunders be devil U.S. housing recovery, by Aruna Viswanatha, Reuters