WASHINGTON, Nov. 18 (UPI) -- Director of the U.S. Homeownership Preservation Office said Thursday an ounce of mortgage modifications was worth a pound of foreclosure headaches any day.
Beyond that, in written testimony for the House Financial Services Subcommittee on Housing and Community Opportunity Phyllis Caldwell said it was a requirement that lenders participating in the federal Home Affordable Modification Program take steps to help troubled homeowners before moving forward with foreclosures.
"The focus here is on early intervention," she said.
Lenders, she said, were required to "reach out to all potentially eligible borrowers when they are only two months delinquent and there is a still a viable opportunity to save the loan."
Lenders, she said, must also suspend foreclosure proceedings involving homeowners who have applied to the HAMP program and evaluate "alternative" or "private" mitigation programs for borrowers who do not qualify for HAMP.
Costly to borrowers and lenders, "Foreclosures ... dislocate families, disrupt the communities, and destabilize local housing markets," she said.
Improper foreclosure practices by mortgage servicers, she added, are "unacceptable."
Further, "If servicers have failed to comply with the law, they should be held accountable," she told the panel.
Caldwell outlined a score of state and federal agencies investigating the "foreclosure crisis," in which lenders pursuing foreclosures allegedly engaged in "robo-signing" documents -- signing them so quickly, they are certain to have missed a meaningful review.
