Despite Anticipations More Lenders Fail To Stop Foreclosures

Tags: california, Foreclosures, lenders, mortgage
Posted in Foreclosure, May 13th, 2008 |

More and more personal stories are tumbling in to show that despite anticipations more lenders are failing to stop foreclosures. The companies do not have the infrastructure to handle the sudden increase in volume of work.

Thomas and Tracy Barboza are just one of many who are suffering. Three times they found an escape route from foreclosure but three times their lender failed expectations. Finding it impossible to continue with their mortgage the Barbozas are trying to sell their house. Since last summer they have got three offers. The offers are however less than the mortgage amount. This made their lender – Countrywide, refuse to write off a part of the loan and allow the sale. The couple has already moved to a sparse flat ready for the sale. But things are not maturing. Thousands of others like them are in the same boat. The lenders remain adamant and unrelenting.

On the other hand the loan companies complain that they do not have the infrastructure to deal with thousands of negotiations and appeals for short sales. This is one of the reasons for their silence, which may be interpreted as refusal. Those affected in and involved in the matter like the house owners and realtors compare this to a black hole; the system just cannot be cracked and everything is sucked into it. Automated phone calls cannot be penetrated and callers are made to wait for hours. Inside the company paper work is piling up and those dealing with the matter do not have the final authority to make a decision.

The American Securitization Forum that comprises of mortgage holders and companies in the loan servicing business, say that all steps are being taken to address the issue. The problem is that nothing can be steam rolled as each case is specific and needs individual attention. Some loan companies have introduced online application forms. Nevertheless short sales pose specific problems, as it would mean waiving a chunk of the principal loan. This could be something around $100,000. First and second mortgages on the same property further complicates matters.

But consumer groups say that rejecting a short sale offer is something positive and cannot be explained away easily. Countrywide has now agreed to expedite the matter of short sale. The firm has apologized to the Barbozas but as yet the couple has not got a positive reply.