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Efforts to Prevent Foreclosure Slipping

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By : Cassiano Travareli    99 or more times read
According to a report released by the State Foreclosure Prevention Working Group, an organization of banking regulators and attorney generals of different states, it would seem that the efforts of the industry to keep distressed homeowners from losing their homes to foreclosure have been declining.

Each day, more and more troubled borrowers are not receiving meaningful assistance from their servicer resulting to a dramatic increase in delinquent prime and subprime loans.

In their recent report, it was determined that 8 out of 10 troubled borrowers are not involved in any work out or foreclosure mediation that will allow them to successfully avoid foreclosure. This rate is certainly higher than what was initially reported last April.

Based on this report, mortgage servicers and lenders are advised to address the large number of foreclosure defaults in order to minimize the negative impact on the economy. Many non-profit organizations and housing advocacy groups have even lend their helping hand in order to provide foreclosure assistance to both lenders and distressed homeowners.

Most of the groups providing foreclosure help act as foreclosure counselors and mediators between the lenders and troubled borrowers. A significant percentage of the negotiations have been successful and greatly benefited both parties. Of course, with the foreclosure rate rising dramatically, these groups have been having trouble keeping up.

With the problems in the housing industry extending to the financial markets, it is not surprising that the government decided to step in. First, there was the $300 billion housing rescue program for troubled lenders and borrowers and then, the $700 billion bailout plan for the purchase of mortgage-tied assets from distressed investment firms.

For now, it is a matter of waiting whether these two major efforts will somehow turn the tide. But the government should not stop here and re-assess the situation in the housing industry in order to step up their fight against foreclosure.
Cassiano Travareli has been educated in the finer points of the foreclosures market over 5 years.

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