A new survey from the housing counselors in California points to banks’ numerous failures to prevent foreclosure.
While the $26 billion Attorney General settlement took place, the California Reinvestment Coalition (CRC) surveyed over 70 housing counselors on banks performance on foreclosure prevention efforts in California.
While banks made numerous promises to policymakers and consumers, the California counselors overwhelmingly reported the lack of accountability for banks’ failures. The survey highlights the need for strong enforcement of the settlement and permanent consumer protection legislation in California that protects Californians from irresponsible foreclosure prevention practices like “dual track” (AB 1602/SB 1470).
Conducted in January and February 2012, CRC’s survey represents responses from more than 70 counselors representing 50 nonprofit housing counseling agencies across California
We will highlight each of the finding over the next week days.
Finding #1: 100% of surveyed counselors reported that dual track was a serious and common problem that was devastating families. This has led to horrible outcomes for homeowners, as 86% of counselors reported that clients “often” or “sometimes” have their home sold while their bank is considering their loan modification application. In their desperation, homeowners become easy targets for scams or are pressured into a short sale or bankruptcy to postpone the sale date.78% of counselors reported that homes were “often” or “sometimes” sold in violation of HAMP rules and 70% were “often” or “sometimes” sold in violation of GSE rules.
Look for Finding #2 tomorrow