Complaints against a federal foreclosure prevention program from troubled homeowners who are at risk of losing their properties to bank foreclosure listings are growing in numbers every day.
Some of these troubled homeowners said that they have lost their jobs and could not afford to pay for their mortgage, and thus, facing the risk of losing it to foreclosure. They said that because they could not afford to pay for their houses, the federal government should help to make them affordable.
According to industry experts, thousands of homeowners nationwide are facing obstacles one after the other in their efforts to avail of loan modifications under the $75 billion program. The Home Affordability Modification Program was once regarded as the core of the Obama Administration's campaign to help struggling homeowners avoid bank foreclosure listings.
Market data showed that a fraction of borrowers who are eligible for mortgage relief under the loan modification program have been enrolled and were able to have their loans change to low monthly payments.
Consumer advocacy groups are pointing out the fingers on banks over the failure of the loan modification program to help many eligible homeowners. They said that banks are controlling who will qualify for the mortgage relief program.
They added that distressed homeowners who were not able to avail of the federal program are often directed towards banks' own mortgage relief programs, which advocates said, are more costly and complicated.
Industry experts said that many banks offering loan modification programs charge large upfront and back-end fees that are prohibited under the federal government's program. The practice of these banks is causing borrowers to incur more debts.
Because of the slow pace of mortgage relief and the exorbitant cost of availing of loan modification programs, many frustrated homeowners are taking matters into their hands, such as writing, e-mailing or calling members of the U.S. Congress.
Some lawmakers are responding to the cry of some troubled homeowners. Representative Keith Ellison has scheduled a meeting in Minnesota, Minneapolis to address complaints and gripes of local homeowners who are facing bank foreclosure listings about the slow loan modification process.
Ellison's office is expecting about 200 people to attend the town hall meeting which will be held at the Center for Changing Lives.
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