We Need a Real Lifeline
Jul 31, 2020666.2K Shares11.1M Views
Today’s news of a major effortto stave off foreclosures sounds like another encouraging sign that lenders and the government are working together to tackle the mortgage crisis.
But here’s the problem. All those previously announced attemptsto tally up some loan modifications and keep people in their homes haven’t quite worked out, at least not on a widespread scale. And there’s no reason to think this plan will either.
All told, loan modifications affected less than 1 percent of the 3 million loans with adjustable rate mortgages that were outstanding in the third quarter of last year, consumer advocates noted.
There are difficulties on both sides. Lenders say they try to reach out to borrowers, but some won’t respond, either out of fear or a lack of knowledge about workouts. Some workouts don’t reduce the costs of the loan and amount to little more than extended repayment plans, which leave a borrower in the same bind. And there’s no uniform system or requirement for reporting loan modifications, so it’s not clear overall how much is being done, and on what terms.
Until those problems get addressed, we’ll have lots of voluntary efforts with encouraging names like Project Lifeline and Hope Now, but little real change.
Paolo Reyna
Reviewer
Paolo Reyna is a writer and storyteller with a wide range of interests. He graduated from New York University with a Bachelor of Arts in Journalism and Media Studies.
Paolo enjoys writing about celebrity culture, gaming, visual arts, and events. He has a keen eye for trends in popular culture and an enthusiasm for exploring new ideas. Paolo's writing aims to inform and entertain while providing fresh perspectives on the topics that interest him most.
In his free time, he loves to travel, watch films, read books, and socialize with friends.
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