At Hearing, Bennet Presses Witnesses on Unnecessary Confusion, Difficulty of Modifying Home Loans
Washington, DC – Colorado U.S. Senator Michael Bennet today renewed his push to help Colorado families stay in their homes by pressing for more transparency and clarity and a new appeals process in foreclosures.
In a Senate Banking Committee hearing, Bennet shared the stories of two Colorado families in danger of losing their homes to highlight the need for changes to the Home Affordable Modification Program (HAMP) and to how mortgage servicers handle foreclosure cases.
“I’ve had 22 months of town hall meetings with people bringing their documents and transcripts of voicemails and e-mails from servicers telling them that what they’re doing is okay, that they’re in compliance with the law. And then they find out that they’ve been hit by a penalty of some kind or another,” Bennet said at the hearing. “One of the people that was affected by all this, Wendy Diers, said, ‘We did everything we were supposed to do. This is such a boondoggle of a mess.’ She described it. It is a boondoggle of a mess.”
This weekend, the Denver Post chronicled the story of the Diers family of Fruita, Colorado, who fell behind on their mortgage but were later able to pay off the full balance of their loan. However, despite assurances from officials with their loan servicer that their mortgage had been paid, the servicer’s law firm is still seeking a foreclosure sale—six months after the Diers paid off their loan.
The same Denver Post article also highlighted the confusion and problems associated with the modification process. When the Compo family of Colorado Springs encountered financial difficulties, they were told by their loan servicer that they would not be considered for modification until they missed two payments. After intentionally missing payments to qualify for a modification, the family struggled with their servicer and were ultimately denied a modification.
Bennet wants changes to how mortgage servicers handle foreclosure cases and improvements to HAMP that would help struggling homeowners keep their homes. In April, Bennet called on the Treasury Department to establish an independent appeals process for homeowners who are denied a loan modification. He also proposed that when a request for modification is denied, the loan servicer would provide homeowners with a justification for the denial in writing with meaningful information about the basis for the denial so that the homeowner can determine whether the decision was appropriate.
Bennet also led his Senate colleagues in a request for more resources for housing counselors program to keep up with need. He pushed for more qualified housing counselors on the Western Slope where the foreclosure crisis is especially acute.
In February, Bennet successfully urged Treasury to forbid mortgage providers from initiating or continuing the foreclosure process until it determines whether a homeowner is eligible for mortgage loan assistance through HAMP. However, the experiences of families in Colorado show that there is still confusion and miscues flooding the foreclosure process.
For a video of Bennet’s statement and question and answer part of the hearing, please click here.