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Residents Discuss Servicers, Buying VA Foreclosures, Other Concerns

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By : John Cutts    99 or more times read
A Senate Committee on Business and Commerce recently held a hearing to listen to the complaints of homeowners in Austin, Texas. Residents of the city expressed their frustration over mortgage servicers and other housing industry-related issues ranging from buying VA foreclosures to facing foreclosures themselves.

Aside from the increasing number of properties under Austin foreclosure listings, area residents' primary complaint was reportedly against mortgage servicing companies. According to some homeowners who attended the hearing, they find it difficult to communicate with servicers like Ocwen Financial Corp. and American Home Mortgage Servicing Inc. (AHMSI).

Most of the residents who testified at the hearing have stated that the high number of Texas foreclosure properties is caused by the lack of regulation and compliance within the mortgage servicing industry. They alleged that such companies change the rules daily, with some recounting stories of calling servicers' offices daily but getting no resolution.

Lawyers for foreclosed homes owners have asserted that the problem demonstrates that the federal government's mortgage modification program is not working, with most servicers preferring to foreclose than offer alternatives or modifications to homeowners. This claim, however, was denied by lenders and mortgage servicers operating in the city.

According to representatives from Wells Fargo, Colonial Savings and JPMorgan Chase, there are no winners in a foreclosure and it is not their purpose to foreclose on homeowners. Local lenders and servicers have argued that helping customers is their primary concern, not adding to the supply of properties for people buying VA foreclosures and other foreclosed properties for sale.

Mortgage servicers, including Ocwen and AHMSI, are unregulated in the state of Texas, but legislators are reportedly considering changing existing rules. The state's Department of Savings and Mortgage Lending can regulate mortgage service companies, but current rules in the state only allow the companies to register in Texas on a voluntary manner.

In response, servicers have argued that there is enough regulation in place in the area. Legislators at the hearing have taken note of the fact that both Ocwen and AHMSI did not attend the committee hearing. They also pledged to address the issue of mortgage service regulation and other housing industry-related issues, such as buying VA foreclosures and other distressed properties in the state and providing foreclosure alternatives to troubled homeowners.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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