Criticism Of Bank Mortgage Foreclosures
As thousands and thousands of people in the US faced the prospect of losing their homes during the economic downturn, bank mortgage foreclosures have come under severe criticism. In fact, the lawmakers as well as the federal regulators asked Fannie Mae and Freddie Mac to stop foreclosures temporarily to allow borrowers to get new mortgages. (See Reference 1) |
However, this stoppage was limited just to those homeowners who were actively looking to refinance their mortgages to get eligible for mortgage modification. (See Reference 1) Both Fannie Mae and Freddie Mac insisted that the dual tracking system in place would help not just the homeowners, but also the lenders. In this tracking system, the lenders would be able to figure out which were the homeowners who were having their homes foreclosed and among them who was seeking for loan modification. (See Reference 1)
According to the 2 federal government sponsored enterprises, this tracking system helps to curb losses as the foreclosure process can be a long drawn out, and the longer a homeowner is delinquent in repaying the mortgage, the harder it gets for him or her to make the backlog of payments and get current. (See Reference 1) However, there were claims that many mortgage loan providers were making use of so-called robo signers, who were employees signing foreclosures without looking into the facts and problems that people were facing during the economic downturn. Hence, thousands of people across the US lost their homes to foreclosure and still thousands were facing the threat of foreclosure.
However, the lawmakers differed in opinion with regard to the dual tracking system. They felt that it was unfair as well as confusing. Also, they wanted to know what system was in place to ensure that foreclosures were legal and fair. (See Reference 1) This came as many homeowners who lost their homes to foreclosures claimed that mortgage lenders were not responding to their queries as to why their mortgage modification request was denied. In addition, many homeowners also claimed that they faced delays as the lenders lost their paperwork and documents and also trial mortgage modifications were cancelled without a valid reason. (See Reference 1)
This clearly points out that there is a problem when it comes to the mortgage industry which the industry is not willing to accept. Many wonder why banks opt for foreclosures as they lose more money when a property is foreclosed. It would be in their interest to push for short sales or mortgage modification. At least these help to reduce their losses.
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Criticism Of Bank Mortgage Foreclosures
Unfortunately, due to the economic downturn, millions of people lost their homes due to foreclosures and there are still millions of people facing the same threat. People who are in foreclosure are unable to make the monthly mortgage payments and they become delinquent, the mortgage lender starts a foreclosure procedure. 
