Recently I wrote an opinion article -- “As Foreclosure Crisis Keeps Growing, Lenders, Borrowers Need Mediation,” that appeared in the Dec. 8 Bakersfield Californian. It also is posted on this blog.
It recounted the plight of a homeowner, who appeared in court with documents showing he was negotiating with his lender for a loan modification, while at the same time the lender was evicting him. He could not understand how the lender could be working with him and against him at the same time.
A McClatchy newspaper story today explains how this can happen.
In the fine print of the form homeowners fill out to apply for the Obama administration’s Home Affordable Modification Program, which lowers monthly payments for three months while the lender decides whether to provide permanent relief, borrowers waive notification rights. This allows lenders to reject borrowers from permanent modification without written notice and auction off homes without warning, according to the newspaper.