Minneapolis and St. Paul residents who are living in fear of losing their homes to foreclosure know firsthand just how stressful it is to be in debt. However, the situation can become even more stressful when lenders fail to respond to homeowners about possible loan modifications in a timely matter. In fact, this time delay can even lead some further into debt and eventual foreclosure.
A report was released on Wednesday that focused on five of the nation's largest U.S. mortgage servicers. This report came from 29 performance tests to see if these servicers were following the new mortgage servicing rules.
Sadly, the report found more needs to be done in order to better protect homeowners.
According to the report, the banks need to get better about collecting all of the paperwork from homeowners. Additionally, the lenders need to notify homeowners in a more timely matter on the status of their loan modification applications.
Lastly, it is much easier if homeowners have a single point of contact at a bank. However, even though this is one of the new mortgage servicing rules, there are still quite a few homeowners complaining about being bounced around from person to person.
The reason all of this is important is that these rules can help a homeowner hold on to their home. For example, the longer it takes for a servicer to respond to a loan modification request, the more time a homeowner has to dig deeper into debt.
In light of this report, three of the major banks said the issues have been resolved or are in the process of being resolved. Of course the hope is that these issues will not continue on into the future.
However, aside from loan modifications, those facing foreclosure in the Twin Cities area should know other debt relief options may be available to save a home. An attorney with experience handling debt relief in the area can provide more information on these options.
Source: Star Tribune, "Mortgage settlement monitor says banks still falling short on helping struggling homeowners," Andrew Miga, June 19, 2013