MA Foreclosures

Massachusetts Foreclosure Bailout

Biggest Banks Brought To Court To Combat The Foreclosure Situation

Two of the largest banks of the country Wells Fargo and Bank of America were brought to court recently by many homeowners in the city due to the Boston foreclosed homes. The foreclosure situation might get serious as many of the worried borrowers were planning to sue their lenders. Mortgage banks might face a class-action lawsuit as some groups were planning to go to court against them.

Wells Fargo and Bank of America were accused of not obliging to the norms of the federal Home Affordable Modification Program. The plaintiffs in their lawsuits mention that they agreed to accomplish this as they are receivers of bailout funds, which they are to receive from the Troubled Asset Relief Program fund.

Wells Fargo, Bank of America and other mortgage servicers and lenders that got TARP money were ordered to modify their rules and regulations in order to make them more affordable to borrowers, as reported by HAMP provisions. The economic downturn and the foreclosure situation that was causing a drop in home prices, joblessness, and business closures, were the reasons behind homeowners turning defaulters in mortgage payments. Borrowers who opted for the adjustable-rate mortgage loan were the worst sufferers as they were unaware of the hidden clauses and schedules that turned out to be very high.

The Treasury Department issued additional rules to incorporate more distressed borrowers and requires the modification process to get more streamlined. To make the transition period smoother, a three-month trial period was implemented. The qualifying loan payers will be eligible for permanent modification procedures.

Homeowners were complaining that Wells Fargo and Bank of America did not follow the HAMP provisions that were mentioned in the agreement at the time of loan sanctions. Moreover, the Massachusetts foreclosed homes situation(including Boston) was not addressed by the big banks properly.

There were complaints against the big banks that even after paying regularly, modified loan borrowers were not receiving any permanent modification after their three-month trial period got over. Treasury Department records showed that only 2 percent of the total home loans in Wells Fargo received a permanent modification notice.

There were many reports of homeowners who applied to the court to invalidate foreclosure sales that were sold without any prior notification. These were happening across the east coast, as these banks were not following the terms set under the HAMP initiative that were agreed upon while signing these deals.

About the Author

Julie Thompson, has been working on ForeclosureWarehouse.com studying the foreclosures market, helping buyers on the finer points of foreclosure homes. Try to visit ForeclosureWarehouse.com and search foreclosed homes by state

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