Bank foreclosures picking up pace; mortgage modification programs fail
A new investigation has discovered that the much ballyhooed home mortgage modification programs have all failed and now banks are picking up the pace of foreclosures.
Story from Here and Now. Listen to audio above for full report.
After a lengthy pause, while banks reviewed their policies and procedures, home foreclosures are back on the rise recently.
By one measure, there was a 14 percent jump in loan default notices over the past three months. And 16 million Americans are still behind on their mortages.
Making matters worse, Paul Kiel of ProPublica has found that the programs designed to help Americans through these hard times are failing all over the place, but at the bank and even at the government level.
"I get a lot of people saying 'I'm glad I read your story. I thought I was crazy. I think a lot of people are glad to know it's not just them,' " Kiel said. "At the same time, I get emails saying the story makes them feel hopeless."
Kiel said the biggest stumbling blocks have been bank bureaucracies that accidentally or deliberately misplace paperwork and government programs that are trying to stop Fannie Mae and Freddie Mac from losing money.
Very few Americans have managed to take advantage of these programs that were designed to help them. Kiel said that most Americans who are behind on their mortgages these days aren't people who bought more house than they could afford, or lied on their mortgage application. Rather, they're people who lost a job or had a spouse lose a job and suddenly don't have enough money to spread around.
Kiel even cited an example of a woman who lost a job and found out her cancer had metastasized all on the same day. She's been trying to work with her bank for months and really just wanted not to worry about being foreclosed on in her last year to live.
After ProPublica and MSNBC did a story on her problems, she was able to get a modification. But her story of tragedy is the exception. Most people won't ever get a modification.
"Sometimes it takes getting on national television" to get something done," Kiel said.
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