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Housing Group: Banks Bungling Loan Modifications

Photo: Housing assistance groups say banks are failing to help homeowners avoid foreclosure. Photo credit: FBI.GOV
Photo: Housing assistance groups say banks are failing to help homeowners avoid foreclosure. Photo credit: FBI.GOV
May 9, 2013

RICHMOND, Va. - Modifying a mortgage still can be a difficult proposition - even after last year's national agreement by banks to make improvements.

Just ask Rita Williams, who's been trying for three years to stay out of foreclosure. She's faced one bureaucratic bungle after another, such as having a modification plan rejected because a notary simply corrected her address from the "county" of Richmond to the "city" of Richmond.

"It's making me feel that they can have this house," she said. "They can go ahead and take it, because I'm stressed out."

According to the housing assistance group Housing Opportunities Made Equal (HOME), Williams' experience with Bank of America isn't an isolated incident. The group has filed many complaints on behalf of homeowners with the federal government's Consumer Financial Protection Bureau, and several of those cases have been remedied.

The bank in question issued a statement saying it has completed or approved nearly $30 billion in relief for more than 330,000 homeowners and has offered life-of-loan interest rate reductions to more than 40,000 others in 2012, but Ali Faruk, director of HOME's Center for Housing Policy, said there are still too many problems.

"They constantly are putting homeowners who could pay to stay in their homes into foreclosure," he said.

Before the new agency was created, there were few other ways to get help.

"All we could do is harass the banks over and over," he said, "and try to keep going up the level of leadership to get somebody's attention."

Alison Burns, Public News Service - VA