MAYBE HELP WILL COME - STOP FORECLOSURE ??

I have written several blogs which address the blight of the homeowner in trouble because of the recent economic downturn.  I’m talking about people who borrowed an affordable sum after making a down payment to purchase their dream home. Until the recent economic downturn these homeowners made their monthly payments ( in many cases for years). Then layoffs started.  In a great number of cases it was impossible to replace lost jobs at their salary range..  Many were forced to accept jobs paying less. By the time life starting getting back to normal, their mortgage payments were way behind.  To make matters worse their new salaries don’t stretch enough to make a full mortgage payment.
 
The federal government had multiple opportunities to act in a way that would have thrown a life line to these good folks and each time either failed to act or threw the life line beyond reach.  What were these opportunities?
 
Congress could have amended the Chapter 13 Bankruptcy Code in such a way as to give a Bankruptcy Judge the bases upon which to fix most of these loans. What was proposed was simply giving ‘Middle America’ the same rights as General Motors has, not expanding the Bankruptcy Code.  Congress took away many rights from homeowners a number of years ago and all that was proposed was restoring those; rights and,
 

Congress then set billions of dollars aside to give folks in this position a way to modify their home loans to  make their mortgage payments affordable and at the same time caused very little,( if any pain) to the financial institutions.  There can be little question that this vast amount of money thrown at the problem has done little, , to help the consumer.  In short a failure. . What is more distressing are the results of a homeowners when unsuccessful in obtaining  a loan modification.  The abuses in this area has increased the number of foreclosures, in many cases because each those homeowner thought they were about to get their home loans modified.  The misconduct on the part of the financial institution usually starts with a temporary fix of lowering the payments and/or interest rate while a modification is being processed.  Somehow the modifications are seldom approved and the foreclosure, clock keeps ticking while the loan modification is processing.  For some it’s a matter of days from being denied a loan modification and their foreclosure.
 
Now there may be a glimmer of hope.  The Attorney Generals from a number of states have weighed in on the problem of trying to come up with a fix for HAMP (the law that was to fix home owners having a problem).  These States Attorney Generals are pushing to amend/change the rules as to what lenders can and cannot do while a modification is being considered especially where there is a temporary fix in place.  Briefly it would prevent the abuses that are currently going on..  A word of caution efforts to help the homeowner continues to build a strong opposition in Congress.