The nation’s six largest financial institutions will soon begin contacting homeowners who are seriously delinquent with their mortgage payments in an effort to help them make their loans more affordable. Those whose home loan payments are 90 days or more behind will receive an additional 30 days’ reprieve while the lenders try to figure out how to make the loan agreement more affordable.
However, this program has drawn criticism from consumer groups and lawmakers alike, as they believe it doesn’t go far enough to keep troubled borrowers in their homes, the report said. Despite the delay, lenders will be under no obligation to actually alter the terms of the loan for troubled borrowers.
“A month-long moratorium on mortgage foreclosure is like a Band-Aid when the patient really needs surgery,” AFL-CIO president John Sweeney told the newspaper.
U.S. Senator Dick Durbin is also pushing Congress to pass legislation that would allow consumers who have filed for bankruptcy to renegotiate the terms of their mortgage so that they can keep their homes through the process, the report said.
Many consumers have been evicted from their homes as a result of the robosigning scandal, which has caused many major lenders to face heavy criticism from lawmakers.