Nearly 1 million people were unnecessarily herded through the foreclosure process in the wake of the housing crisis.
That's according to a new study by the Federal Reserve Bank of Chicago, in concert with other researchers, who determined that bank delays, disorganization and inefficiency caused many families to lose their homes.
Miami foreclosure lawyers know that when the dust began to settle on the burst of the housing bubble, federal regulators were quick to grandstand about getting banks to participate in loan modifications.
The idea was simple: correct your mistakes. Those homeowners only owned homes that were worth more than they owed because the banks had sold them a raw deal. By offering a principal reduction, people could have a chance at a mortgage they could afford - which meant they could remain in their homes.
That was the whole idea of the Home Affordable Modification Program (or HAMP), which was passed by the federal government in 2009.
But here's the truth: It didn't work.
The recent study essentially looked at how many more people might have qualified for loan modifications under HAMP had the program actually worked as intended. This is where they reached the number: 800,000.
That's 800,000 homes lost. 800,000 families.
There was a disparity, the study found, among banks. In unsurprising results, the researchers determined that those banks that had more staff who were better-trained at facilitating mortgage loan modifications had more successful loan modifications. The problem, however, was that the majority of banks did not have enough properly trained staff dedicated to handling the problem.
Here's the bottom line: They did not make it a priority.
Even after the market imploded, they did not make cleaning up their mess a priority. It was the homeowners who were left to pay the price.
Our Miami foreclosure attorneys see this type of attitude every day from those who are employed by these huge financial institutions. There is a lack of accountability that can be astonishing. For our clients, who have never before endured such a process, it can be overwhelming. But that's where we come in. We do understand how these "machines" operate. We understand the laws inside and out, and we fight aggressively to save our clients from foreclosure.
We do know that by the end of this year, HAMP will have facilitated about 1.2 million loan modifications. But the banks were working more efficiently, that number would look more like 2 million.
That's still far short of the 3 to 4 million promised by President Barack Obama when he announced the program three years ago.
The study doesn't specifically point fingers at the banks that were mostly to blame, but it isn't difficult to figure out, considering that a few of the larger mortgage servicers reported completing half the modifications of others.
One of the slowest, Bank of America, was also one of the biggest. This is even more infuriating when you understand that the federal government actually paid these banks to embrace modifications. In other words, taxpayers gave money to the banks that had caused our fiscal crisis in an effort to compel them to fix it.
Think of it this way: Would you pay a bank robber to return the money he stole? Would you pay a burglar to give you back your possessions?
What if he took that money, and then still didn't return everything he'd heisted? That's what's happening here.
This is the kind of backward thinking you are up against.
Let us help you negotiate from strength.
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