Programmes and Measures to Contain Foreclosures Have Been of Little Help

Programes and measures to contain foreclosures have been of little help in California and other states. The National Consumer Law Center, which analyzed programs in 14 states, came to this conclusion after analyzing the situation in these states. Attorney Geoff Walsh of the centre said some changes have been introduced in the original plan so that the lenders become more proactive.

The banks are now expected to state the cost of foreclosure as compared to expenses towards modification of loans. Proof of who owns the loan would have to be given. Sanctions would be placed on banks who do not comply with these terms in all sincerity. The banks would also have to prove that they had seriously given a thought to modifications, short sales etc. The report suggested that either a mediator or a bank should certify that these steps have been taken. Without it the court should not allow foreclosures to proceed.

The representative of Wells Fargo skirted a direct answer and said, “We’re doing everything we can to reach out to customers very early in delinquency proactively.”

Walsh termed the loan modification measures as having gone awry. It has led to the house owners to become confused. They feel their attempts to talk to the authorized persons to have been rudely rejected.

One of the sufferers is Graeme Card residing in San Pablo. He was repeatedly rebuffed by Wells Fargo regarding his condo mortgage. His dues are now $381,000 although the unit is worth currently $200,000. In 2010 his monthly payments will go up further. This will come at a time when an illness has increased his medical expenses. Card in his late thirties is scientist. He got exasperated with the silence of Wells Fargo after repeated attempts to get them to respond failed. He said, “I got fed up with the delaying tactics of the bank, (which) refused to give me an answer, despite numerous documented promises.” From last May he stopped paying hoping that at last the bank would take notice.

Actually like many others who are underwater like him, Card calculated that he would gain by walking away from the mortgage until and unless the principal amount was reduced and brought at par with the current market value of the unit. He explained, “I’m paying into a massive hole of the $200,000 that it is underwater. No matter how much I paid, I could never make any headway on that. I worked out it would be maybe 14 or 15 years to get back to the price at which I bought it ($401,000).”