Home > Mortgages > House Committee Aims to Gut Foreclosure Protection Measures

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Foreclosure_Kevin DooleyThe House Financial Services Committee today will mark up four bills designed to gut foreclosure prevention programs. No other legislation is being proposed to fill the gap and help the estimated five million mortgage holders at risk of losing their homes.

According to the Center for Responsible Lending’s (CRL) Julia Gordon, the proposed legislation would:

Eliminate the Home Affordable Modification Program (HAMP) going forward. This program allows for interest rate reductions and, in some cases principal reductions, for homeowners having trouble keeping up with their payments. Homeowners currently enrolled in HAMP would not be affected.

Kill the unemployment loan assistance program before it starts. This program was authorized under the Dodd-Frank Wall Street Reform Act and is designed to provide “bridge loans,” or short-term loans, to homeowners who have lost their jobs but could make their payments once they are employed again. It is modeled after successful programs currently available in eighteen states, and could fill the gap in remaining states where similar programs are not yet available.

End the FHA Short Refinance program. This program allows homeowners with FHA loans to refinance with a principal reduction.

Eliminate the third round of funding for the neighborhood stabilization program. This program provides communities that have suffered from foreclosures and abandonment with funds to purchase and redevelop foreclosed and abandoned homes and residential properties.

Sponsors of the bills claim the current efforts have not been effective enough, but they have not proposed any other solutions to stem the continuing tide of foreclosures. An estimated 50,000 new foreclosure actions are initiated every week, according to CRL. RealtyTrac reported a record 2.9 million foreclosures in 2010.

“When we’re in the midst of an epidemic, we don’t close all the hospitals—we work faster and harder to find a cure,” CRL president Mike Calhoun said in a statement. “We call on Congress to strengthen foreclosure prevention efforts by holding servicers accountable and requiring a review of every mortgage loan before foreclosures proceed.”

[Related: Solving The Foreclosure Mess: Let’s Get Serious]

Image: Kevin Dooley, via Flickr.com

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  • http://www.Credit.com Gerri Detweiler

    Yolanda – I am terribly sorry to hear what you’ve been going through. I wish I had a clear solution for you, unfortunately, lenders have made a mess of this program. But here’s what I can recommend:

    Contact your elected officials in Washington. Each office (your Senators and Representative) have an ombudsman who helps constituents with problems. Ask them to help you intervene with the bank.

    Contact a bankruptcy attorney to find out whether bankruptcy can help. It may not, but it’s worth a try and the consultation with the attorney should be free.

  • Yolanda Simmons

    2008 I had my wages cut and my husband lost his job. My mortgage is with PNC bank I have been dealing with them a year to modify my loan they would lose a paper, or I had to write 20 hardship letters. This is what they done for me, same interest rate, same amount, same taxes, same insurance they just added what I owed on to the amount .Where is the modification? please help me

  • http://www.credit.com Gerri Detweiler

    Mr. Harris – I would be happy to help if I can. Can you tell me what you have tried to do so far?

  • http://www.granthammond.com Grant in Nashville

    It seems a tad premature to eliminate any of these measures. Clearly, we are not in a Republican controlled House as this would cause the rest of the homeowners who are hanging on by a thread to be snipped.

  • Kenneth Harris

    Our home is going into foreclosure . We are both disabled . Our Loan company HSBC is not wanting to work with us . Can you help us at all ?

    Thank You
    Kenneth Harris

    • http://www.docprep.net Greg

      Mr. Harris, On Wednesday March 2, 2011 HSBC had suspended all foreclosures since the are being investigated by government entities for deceptive practices. If you are on a fixed income, HSBC will give you a permanent modification if you meet the guidelines. If you have any other income outside of the disability, HSBC will give you relief in 6 month intervals up to 2 years.

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