Foreclosure Reform: Slow, Complicated, Too Late?

The economy continues to sag under the weight of the continuing real estate crises. Too many borrowers remain underwater on their mortgage loans. Those borrowers are trapped, unable to refinance, obtain a mortgage modification or sell their homes.

Working solutions have been few. The Home Affordable Modification Program (HAMP) program, touted as providing help to borrowers in trouble, has helped close to a million homeowners in the last two years, but CBS news reports that less than 100,000 of those helped were underwater mortgages.

In other words, those most in need of help were not receiving any from HAMP.

Twenty percent of all borrowers are currently underwater, according to CoreLogic, a data vendor. They report that number equals almost $750 billion in negative equity in the housing market.

“It’s Hard To Imagine The Housing Sector Recovering”

John Walsh, Acting Comptroller of the Currency, spoke to the American Banker Regulatory Symposium, and commented, “It’s hard to overstate the importance of the foreclosure and servicing issues.”

The comptroller’s office is responsible for regulation and enforcement of many of the banking laws. His agency is working through the various reforms and improvements necessary to help borrowers.

He noted the problems of the industry have been “a major drag” for the housing industry, and a healthy housing industry is necessary for the overall economy to recover. Cleaning up the backlog of bad mortgages and associated problems may take another year or two, he predicted.

Underwater Now?

For many borrowers two years may simply be too long to wait. If you need to take action now, a bankruptcy attorney may provide the help you need.

Given the variations of each borrowers individual situation, sitting down with an attorney and discussing your particular financial history is a good way to determine your options.

If you are currently employed, but need to do something about your mortgage and other debts, a Chapter 13 may provide the time and budget organization your need to overcome your financial crises.

If your debt load is overwhelming and your mortgage is severely underwater, a Chapter 7 may be your best option; and attorney can review your situation and provide you with a range of alternatives.

Source: Foreclosure Reforms Could Take Year or More