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Is Obama legislation being ignored by mortgage lenders?

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By : Robert Chapman    99 or more times read
As the number of foreclosure filings continue to rise to unprecedented levels it is hard to believe that President Obama’s recent legislation is being heeded by lenders. The Helping Families Save Their Homes Act of 2009 signed into law in June this year was seen as a lifeline for homeowners who face foreclosure or who have seen mortgage payments rise dramatically as Option ARM’s kick in., a consumer advocacy and assistance group based in Florida believes that it’s just “business as usual” for the banks who have a history of flouting the law.

According to statistics just published, in Florida alone a total of 62,401 properties received foreclosure filings in August, which represents an increase of more than 10 percent from the previous month and a historic high. Initial default notices in Florida also increased by 12 percent from the previous month, and scheduled auctions increased 13 percent.

The new act requires lenders to engage in loss mitigation actions as an alternative to foreclosure including special forbearance and loan modification but by their own admission only about 9 percent of eligible homeowners have had their loan modified on a temporary basis and virtually none of the modifications have been made permanent. As for Mortgage forbearance, it simply never happens.

According to You Be Aware, critics of the act who believe that homeowners are responsible for their own predicament and shouldn’t be bailed out would be advised to consider all the facts. Experts agree that most of the blame for the mortgage crisis is pointed at lenders for creating the problems for it was the lenders who ultimately loaned money to people. It was the lenders who fueled the booming real estate market. It was also the lenders who found creative ways of making the most of riskier opportunities to bolster their investment returns when there was an increased demand for mortgages and a sharp rise in housing prices. Subprime mortgage originations grew from $173 billion in 2001 to a record level of $665 billion in 2005, which represented an increase of nearly 300%.

The Helping Families Save Their Homes Act makes comprehensive provisions to compensate lenders for reduced interest rates, forbearance and other modifications which means that they are not out of pocket for helping distressed homeowners. The banks have already taken their taxpayer bail out money which did nothing to help borrowers but seem unwilling to help taxpayers benefit from their own money.

A spokesperson for said; “As usual where the banks are concerned there seems to be a double standard. They have already benefited from government bailout money and yet they deny their borrowers the same relief even when they were the cause of the problem. The act signed by President Obama in June is a good piece of legislation but lenders will have to be forced to comply with it. Without enforcement the banks will continue to do what they want to do.”

You Be Aware, LLC is a consumer advocacy, information and assistance body that currently has more than 42,000 members. Florida based, they have a track record of addressing the issues of the day affecting consumers, their families, finances and homes.

Their spokesman continues; “As this foreclosure crisis has escalated it has become clear that many lenders took advantage of borrowers during the housing boom and even broke the law when writing loans. Unfortunately most homeowners are not aware of this and don’t understand the law or their rights.”

“There are millions of families across the nation struggling to make their mortgage payments and many more that are upside down in their home where the mortgage is more than their home is worth. Homeowners need to understand that they have rights, that there is legislation in place to offer relief and that there is even legal recourse for those who may have been victim of predatory lending.”

“Our company provides members with information and practical assistance concerning foreclosure, legislation and other critical issues. In October we are holding our first free workshops in Orlando, Tampa, Broward County and Brevard County to educate homeowners about the foreclosure process, their rights and the legal recourse they may have if they are upside down in their home or a victim of predatory lending. The guest speaker at the workshop will be a Florida attorney who has extensive experience in defending foreclosure and protecting the rights of the homeowner.”

Attorney Rick Torpy gives this warning to mortgage lenders;

“We are putting lenders on notice now. Millions of homeowners who are either facing foreclosure or upside down in their homes are unhappy with the way their lender has treated them and are ready to do something about it. Through Youbeaware we intend to assist these defrauded homeowners by educating them about their rights and what legal recourse they may have.”

Rick Torpy is a Florida attorney who defends foreclosure and other financial issues and has been retained by You Be Aware to represent its members.

It would appear that there may at last be some light at the end of the tunnel for desperate homeowners, at least for members of You Be Aware, as they begin to educate consumers and offer effective assistance to those that need it. Remember that the legislation is already in place to help borrowers but getting the banks to comply with it may be another story!

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