Congress heard this week about the dual track "Foreclosure Express vs. Little Engine that Could" scenario that lenders use to simultaneously foreclose on a home and attempt modification - all at the same time. This causes huge confusion issues with the borrower with often the end result of a foreclosure where one was not necessary - or could have been avoided if the borrower was not mis-lead. I wrote about this dual track system here on ActiveRain at WHY IS THE BANK FORECLOSING IF I AM DOING A SHORT SALE (OR LOAN MODIFICATION)?
The Washington Post today published an article stating Fannie and Freddie Mac's position that the servicers, and not Fannie or Freddie, were to blame for the foreclosure meltdown because of how they were handling the borrowers. The article states, for instance:
Meanwhile, (Donald)Bisenius (an executive with Fannie Mae) defended the dual-track approach to mortgage modification and foreclosure embraced by many of its servicers: Attempt to modify a loan to make it more affordable, but also prepare to foreclose if that is not possible.
"While we believe that borrowers who already are under significant stress arising from their financial situations should not be subjected to needless confusion, we also believe that unnecessary delays in an already lengthy foreclosure process would be ounterproductive," Bisenius said.
He noted that foreclosures usually last well over a year, and sometimes close to two. "The dual-track process allows for a delicate balance between the need to minimize losses and protect communities while protecting borrower interests. Lengthy foreclosure delays impose substantial losses on Freddie Mac and taxpayers - by some estimates, $30 to 40 per day and $10,000 to $15,000 per year for every defaulted loan," Bisenius said. "These costs do not include additional losses resulting from depreciation in the value of the property."
Mortgage industry executives have argued for weeks that they are foreclosing only on borrowers who deserve it for missing their monthly payments.
Of important note is that the OCC (Office of Comptroller of Currency), which oversees lenders has specifically accused Freddie and Fannie of lending practices that contributed to same thing Freddie and Fannie are deflecting to the servicers and attorneys.
Keep tuned to CSPAN for continued mudslinging - while borrowers stay confused...........
Copyright 2010 Richard P. Zaretsky, Esq.
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Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 email: RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com.
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