A new report “The Ongoing Chasm Between Words and Deeds V,” is part of a two-year series of survey reports providing snapshots of whether mortgage loan servicing companies are living up to their public commitments to help borrowers avoid foreclosure.
You can download the entire report below.
Key findings include:
- Fraudulent and deceptive lending practices fueled the current crisis, and have driven distressed homeowners to seek help. Nearly half of counselors cited broker or lender fraud in the loans they are seeing, and 65 percent said they see clients who are non English speakers and were given English-only documents.
- Loan servicers are still not working to solve borrowers’ problems and modify their loans. Loan modifications, when they occur, are likely to be short-term with very few principal reductions, which many underwater borrowers need.
- Borrowers’ desperation has fueled a new predatory industry of high-cost loan modification “specialists” who are charging thousands of dollars in fees but providing little to no service. 68 percent of counselors reported seeing more loan modification scams than six months ago. 29 percent of counselors reported that ads for the companies reference the President’s Home Affordable Modification Program.
- The impacts of the foreclosure crisis are severe for tenants as well. Nearly three quarters of counselors noted that tenants living in homes subject to foreclosure are common, and that it is very common for tenants to be denied their security deposits in eviction.
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