According to Treasury Department officials, mortgage firms servicing the 450,000 modified mortgages have until the end of the month to review all their trial modifications and check if homeowners have paid all their monthly amortizations and have completed submitting needed documents. Homeowners who have not completed the requirements are given one month to comply.

The Treasury Department said the review is needed to hasten the transfer of borrowers in trial modification to permanent status. Many homeowners have been paying their modified monthly payments for about eight months, but they are still waiting for their mortgages to be moved into permanent status.

However, according to Richard Neiman, head of the New York State Banking Department, many borrowers whose mortgages have been modified are at risk of losing their modified status because of documentation problems. They have been complaining that lenders and services are continuously losing papers submitted.

In response to the complaints, the Treasury Department has decided to issue new guidelines to preserve the initial gains achieved by the federal program to help homeowners avoid foreclosure homes. The guidelines will hasten the conversion of modified mortgages into permanent status and to relieve borrowers from excessive documentation requirements.

The Treasury Department has been continuously criticized for the slow implementation of its Home Affordable Modification Program. Only about 66,500 homeowners have moved their modified mortgages into permanent status and only about 787,000 borrowers are in trial modifications.

Qualified borrowers are put in trial modifications to ensure that they are able to handle the modified monthly payments and to provide them more time to complete the required documentation. Only after the modified loans become permanent that servicers, lenders and homeowners are given their incentive payments promised under HAMP.

Based on Treasury Department data, about 75 percent of borrowers with modified loans have been making their monthly payments on time.

New York banking superintendent Neiman said that the Treasury Department needs to hasten the standardization of documentation and the set-up of a website that will enable borrowers to track their paperwork. He added that servicers should also be instructed to accept alternative documents in cases where required documents take a long time to procure because of factors beyond the control of borrowers who are doing their best to avoid foreclosure homes.

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The state attorneys said that the 60 percent are seriously delinquent, but they are not getting help from mitigation programs, like the Home Affordable Modification Program and state mediation initiatives.

According to Washington State Attorney General Rob McKenna, co-chairperson of the group, foreclosures will continue to accelerate this year because distressed homeowners are not getting help from prevention programs.

According to a report recently released by the U.S. Treasury, only 7 percent of homeowners who had their mortgages modified under HAMP last year were able to enter permanent modification status.

The report also said that mortgage servicers and lenders have been slow in processing and completing modifications, taking up more than 6 months on the average to complete one modification. A huge majority of modified mortgages are still on the trial stage several months after their modification.

A trend described in the report is the increase in prime mortgages defaulting, based on figures from 13 mortgage servicers. Delinquencies are no longer concentrated on exotic or poorly underwritten loans; they are now spread out to all types of home loans.

The attorneys general have called on mortgage servicers to suspend foreclosure filings on all homeowners involved in HAMP or in mediation programs to help them avoid foreclosure. They further asked that their loan modification programs should reduce principal amounts in areas where there are overwhelming declines in home values to make modifications viable.

They state attorneys also called on the Obama administration to improve HAMP, increase its transparency and reduce the required paperwork to help more distressed homeowners.

A large number of troubled homeowners have been complaining that they are not getting any attention from banks. Joel Bienvenu of Boca Raton, Florida said that he has been applying for loan modification through his lender Wells Fargo since the middle of last year, but he said he keeps getting excuses from bank personnel.

Nationwide, of the over 3.3 million delinquent mortgage loans, only 66,465 modified mortgages have entered permanent modification status and that another 46,056 modifications have been moved on to permanent status by lenders but not yet accepted by borrowers, according to the report.

According to housing analysts, the nationwide program to help homeowners avoid foreclosure is not working because of high unemployment rates and sharp declines in home values.

60 Percent Do Not Avoid Foreclosure, State Attorneys Say is a post from StopForeclosuresHelp.com - Learn how to stop foreclosures.

Attorney General Cordray allocated $1 million to several local agencies in Ohio providing foreclosure counseling services to homeowners. Local agencies were encouraged by the new funding as cutbacks in federal funds were slowing them down in their operations.

Among these local foreclosure prevention agencies is Empowering and Strengthening Ohio’s People, which has helped around 8,000 homeowners save their homes from foreclosure this year. According to ESOP executive director Mark Seifert, without additional funding, the agency would not be able to help the same number and might only help around 5,000 borrowers in 2010.

Another foreclosure counseling agency is Community Housing Solutions in Cleveland, headed by Andy Nikiforovs who said that the funding would prevent the agency from laying off staff.

Local agencies said that their counseling services need to be supported because they have been vital in helping a lot of distressed homeowners avoid foreclosures. According to a study from the Cleveland State University, more than 50 percent of mortgage borrowers in Cuyahoga County that received counseling from foreclosure prevention organizations were able to save their homes from foreclosure.

The study showed that the success rate in the county was twice the success rate reported by other foreclosure prevention programs in other areas. However, according to Paul Bellamy, head of Cuyahoga’s foreclosure prevention program, a drastic drop in federal funding for programs in Ohio will adversely affect their capability to provide needed counseling and assistance.

Since 2007, Congress has already provided two allocations of $180 million each for foreclosure counseling programs and a third allocation of $50 million. A fourth allocation of around $65 million is being considered.

In Nevada, Judge Dawson upheld a ruling made by bankruptcy judge Linda Riegle, preventing the Mortgage Electronic Registration Systems from foreclosing on properties they do not own. Riegle required MERS to show actual mortgage notes or documents proving that they are agents of the lenders before they can foreclose on defaulting properties.

In his affirmation, Judge Dawson stated that MERS, which was launched to help the mortgage industry record and monitor residential mortgages, must show evidence that it owns the mortgage or that it is an agent or legal representative of the lenders before pursuing foreclosures. Homeowners then in Nevada can use this argument to help them avoid foreclosures.

How to Avoid Foreclosures in Ohio and Nevada is a post from StopForeclosuresHelp.com - Learn how to stop foreclosures.

Among recent foreclosure prevention programs are those carried out by officials and community advocates in Idaho, South Carolina and Michigan.

While South Carolina is not as battered as foreclosure-hit states, it has been pursuing projects to prevent further foreclosures because of the rising foreclosure filings in the state, as seen in a recent foreclosure report for the third quarter. It had nearly 7,600 foreclosure postings, with one of every 268 of its houses notified of foreclosure.
Idaho, meanwhile, is fifth in the U.S. in foreclosure rate, with one in 97 of its residential units in foreclosure and Michigan is eighth in foreclosure rate, with one in 122 its houses notified of foreclosure.

One of Idaho’s programs is the one launched by Idaho Attorney General Lawrence Wasden. His office published two downloadable handbooks: Foreclosure Prevention and Foreclosure Scams: How to Tell the Difference and Buying a Home.

The handbooks are full of information but are easy to read. They are also comprehensive, including all programs to avoid foreclosure, such as federal foreclosure prevention programs and lender modification programs. They also provide information on the foreclosure process in Idaho, on common mortgage schemes and fraud laws in Idaho.

In Charleston, South Carolina, the nonprofit Homeownership Resource Center held an event called Hope for Homes in the city’s convention center to help homeowners manage their finances and save their houses from foreclosure. Homeowners presented their loan documents, bills and pay slips to lawyers and federal counselors so their situation can be analyzed and be advised on further actions to do.

Debbie Kidd, head of Family Services that run the resource center, said that the recent event resulted in fewer people seeking assistance, but the number of homeowners going to the resource center has been rising. She said that the center is handling around 1,500 active distressed cases and that they have been resolving problems within days or months, depending on negotiations with lenders.

In Michigan, distressed homeowners are being helped by the Michigan Foreclosure Prevention Project, the State of Michigan Save the Dream program and the United Way Project.

To get help to avoid foreclosure in Michigan, a troubled homeowner just needs to call a nonprofit housing counselor or a local legal aid officer.

Avoid Foreclosure: States and Cities Carry Out Initiatives is a post from StopForeclosuresHelp.com - Learn how to stop foreclosures.

It is even better if one seeks help earlier – when finances are fast getting tight and when missing the next monthly home loan payment is a real possibility.

Helping California homeowners avoid foreclosure has also been among the priorities of housing advocates and nonprofits in the state and among the issues addressed by legislators and officials in the state.

Last week, Governor Arnold Schwarzenegger signed into law a Senate bill which would make it illegal for any lawyer, broker, real estate agent, consultant or foreclosure prevention company to collect fees upfront from homeowners. The law requires any foreclosure prevention agent to collect fees only after the promised loan modification or foreclosure prevention service has been delivered.

State Attorney General Edmund Brown Jr. has also launched a consumer alert informing homeowners that it is now unlawful for foreclosure prevention services to charge fees upfront and to collect fees for services that have not been provided or completed.

Brown explained that a lot of distressed homeowners have been victimized by unprincipled lawyers and brokers in the past because there was no law preventing them from charging fees and collecting fees at the initial meeting. Essentially, the homeowners paid for smooth talks on how to avoid foreclosure and for promises that were not delivered.

Last August, Brown required 386 foreclosure prevention consultants and mortgage assistance firms to register and make a $100,000 bond with his office. He also ordered over 24 foreclosure prevention firms to prove the truthfulness of claims they were making in their Internet and direct mail advertising.

Since July, the state attorney’s office has sued 14 firms and 21 individuals who have victimized homeowners, has obtained court orders to close over 30 firms and has helped the courts impose prison sentences on deceptive mortgage consultants.

This year, over 2,500 homeowners have filed complaints against foreclosure prevention providers with his office, a staggering increase from only 200 complaints filed in 2008.

The state attorney also reiterated his advice to troubled homeowners not to pay fees upfront, not to ignore letters from their lenders and servicers, not to transfer their titles to anyone, not to make loan payments to foreclosure services and not to sign documents without first reading them thoroughly.

All in all, how to avoid foreclosure is not an easy process, but homeowners in California can carry them out with help from their state officials and nonprofit counselors.

How to Avoid Foreclosure in California is a post from StopForeclosuresHelp.com - Learn how to stop foreclosures.

Atlanta nonprofits including the Rainbow PUSH Coalition and the Consumer Credit Counseling Service of Greater Atlanta were able to convince Wells Fargo to implement a foreclosure moratorium this month until the 28th.

According to Wells Fargo spokesperson Jay Lawrence, the bank has heard from civic and community leaders about the foreclosure problems and is now responding to their requests.

In the meantime, Consumer Credit Counseling has informed the public that it has obtained $3.5 million from the federal government’s National Foreclosure Mitigation Counseling Program to finance its foreclosure counseling programs throughout Atlanta and nearby metro areas.

Suzanne Boas, head of Consumer Credit, said that the nonprofit will use the money to conduct more than 18,000 counseling workshops to help distressed homeowners keep their homes.

Boas said that the counseling workshops are free for all homeowners. She called on troubled borrowers to attend the workshops because it is easier for them to avoid home foreclosures if they obtain help early in their default stage.

To further foreclosure assistance programs, the Rainbow PUSH Coalition is also holding its Creating Opportunities Conference this month to help homeowners negotiate affordable loan payments with their lenders.

John McCosh, spokesperson for Consumer Credit, called on homeowners to participate in the conference so they can meet with their lenders. He said that the foreclosure process can proceed quickly in Atlanta from initial default notice to foreclosure sale.

McCosh added that distressed homeowners can improve their chances of putting foreclosure proceedings on hold if they attend workshops where they can show their financial documents and explain their current situations to bank representatives.

Wells Fargo, which has acquired Wachovia in 2008, said it has helped 1,400 borrowers in Atlanta avoid foreclosure over the past month and many more could be helped if they reach out for assistance.

Bank spokesperson Lawrence said that the bank will conduct two foreclosure prevention sessions this month to help homeowners explore several options.

Lawrence added that the bank will not proceed with any foreclosure in the Atlanta metro area until the workshops are completed. He said that a number of homeowners attending the workshops would be given extensions so that they can further consider viable options to avoid home foreclosures.

Avoid Home Foreclosures in Atlanta with Help from Nonprofits is a post from StopForeclosuresHelp.com - Learn how to stop foreclosures.

Based on data from the federal agencies, more than half of homeowners who had their mortgages modified in the first 6 months of 2008 had redefaulted within a year from date of loan modification.

The data showed that the level of monthly home loan payment reduction had significant impact on the rate of redefault.

About 1 in 3 mortgage borrowers whose monthly loan payments were lowered by at least 20 percent had redefaulted within 12 months. This ratio was far lower than the big percentage of redefaults in mortgages which were not modified substantially. Over 60 percent of homeowners whose monthly loan payments increased or remained unchanged redefaulted within 12 months.

These high rates of redefaults have prompted housing advocates and other critics of the Obama administration to say that the loan modification program is a waste of billions in taxpayer money because it is not able to help Americans avoid foreclosed houses.

Federal officials however argued that the foreclosure crisis could have plunged the country into worse conditions if the Home Affordable Modification Program was not crafted and implemented.

The Obama administration is now putting further pressure on lenders to make substantive changes in the way they modify loans so that monthly home loan payments become affordable. Officials have been encouraging lenders to reduce interest rates to as low as two percent.

As of August, the Obama foreclosure prevention program has put approximately 360,000 troubled homeowners into a 3-month trial period under the loan modification scheme. If the homeowners are able to sustain their monthly payments for three months, lenders would extend the payment of lower monthly payments to 5 years.

In the past months, most lenders modified home loans just to enable troubled homeowners to make their accounts current. This strategy increased monthly payments for a lot of hopeful borrowers who were expecting substantially lowered monthly payments.

After federal agencies put more pressure on lenders and servicers, especially those which have received billions in bailout funds from the government, lenders shifted their modification strategy to reduce monthly loan payments.

These reduced monthly loan payments accounted for almost 80 percent of all new loan modifications in the second quarter of this year. This significant increase from the percentage in the first quarter is expected to help more homeowners avoid foreclosed houses.

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If your spouse has a stable job and if your prospects of getting back into the work place in a few months are strong, your chances of saving your house from foreclosure are strong.

There are now an increasing number of banks who are considering giving newly laid-off workers about 3 to 6 months relief from monthly payments as these workers look for a job.

If you can show your lender that your finances are not beyond repair, that your spouse is still working and that your employment record indicates that your skills are in demand, your lender may decide to give you a chance to save your house and may delay foreclosure proceedings.

Bank of America, for instance, has started helping responsible borrowers who have just lost their jobs. It has been extending temporary loan forgiveness for 3 to 6 months to borrowers who can show they can find another job in just a few months.

In addition, the prospect of avoiding foreclosure now for the unemployed is getting a boost from proposals from various sectors about providing temporary financial loan assistance to borrowers who have lost their jobs.

One proposal came from analysts of the Federal Reserve Bank of Boston who conducted studies on the federal foreclosure prevention program. The analysts contended that the program should change its focus from modifying loans to providing loans to qualified borrowers to help them make their monthly loan payments as they look for another job.

If the loans or grants can be given with a repayment period of one to two years, it would help a lot of currently unemployed homeowners who have exhausted their savings to make their monthly loan payments.

Unfortunately for homeowners who have not found work after several months of job hunting, whose spouses are not working or have also lost their jobs and whose loan amounts have increased far above the value of their homes because they took out interest-only loans, the only option to avoid foreclosure may be short sale.

Short selling as a strategy for avoiding foreclosure has been carried out by many distressed homeowners even before the economic downturn. Before embarking on a short sale, make sure that your lender accepts the home sales proceeds as full payment of your delinquent home loan.

Avoiding Foreclosure If You Have Lost Your Job is a post from StopForeclosuresHelp.com - Learn how to stop foreclosures.

This is advisable for “non-judicial” states like Texas where the foreclosure process is fast and negotiations with lenders are hard to establish.

Once you file for bankruptcy, your lenders must stop all collections as well as the entire foreclosure proceeding. This is why it is a good option to avoid foreclosure.

Based on the law revisions of October 2005, before filing for bankruptcy, the homeowner will be asked to have credit counseling from a U.S. Trustee Program-approved non profit agency. The 90-minute counseling tackles financial evaluation, your budget plan and possible alternatives. It may cost you $50, but it can be waived if you really cannot afford it.

There are 2 types of bankruptcy you can choose from:

CHAPTER 7

• Involves the complete liquidation of property to settle the debts and avoid foreclosure.
• For those under the median income group because it can use all available assets to pay for delinquencies.
• An automatic cancellation of all debts may occur
• For those who cannot avoid foreclosure anymore and would just give up their home
• For those who have limited assets and income but has unlimited debts.

CHAPTER 13

• Involves a repayment plan that demonstrates on how the borrower will resolve the problem. A repayment plan keeps the creditors away and helps avoid foreclosure.
• For the borrowers who can afford to pay a minimum of $100 every month for at least 3 to 5 years.
• Saves many of the borrower’s property but it may be difficult to accomplish. Only 1/3 of the cases that choose this option complete it.
• The borrower has to pay for the whole debt plus other extra payments.

But before you consider bankruptcy, ask your lawyer about it. You must also know that there are existing repayment plans that do not require bankruptcy filing and yet can also help you avoid foreclosure.

Another important point you must know is that bankruptcy can ruin credit standing. Though foreclosure can also damage your credit standing, it only involves your mortgage. Bankruptcy can involve other accounts. But this damage only remains in the credit report for 7 years. Eventually, your scores will improve after some time.

To avoid foreclosure, a lot of homeowners find themselves making desperate decisions, so a lot of thinking must be done.

Avoid Foreclosure by Filing for Bankruptcy is a post from StopForeclosuresHelp.com - Learn how to stop foreclosures.

What they do not know is that what their lenders present (short sale, loan modifications, etc.) are their options on how to keep their homes.

So, the Florida Supreme Court thought of a creating a task force that will gather information from trouble homeowners, lenders, lawyers and judges and come out with a solution on how to help more people avoid foreclosure and slow down the pile of foreclosure cases flooding the courts.

With the 28,000 pending foreclosure cases in Miami-Dade alone, how can the courts handle all the foreclosure cases?

One suggestion that they are considering is to require homeowners who are in the early process of repossession to have foreclosure counseling so that they will know what they can do to avoid foreclosure. If the counseling is successful in helping the homeowners deal with their lenders on finding a way to avoid foreclosure, the problem will not have to end up in a court case.

It has been found out that the lack of communication between the lender and the homeowner is common, although both sides want to avoid foreclosure.

Homeowners think that it is such a hassle to call their lender. And when lenders call them to present their situation, the only thing that the homeowner understands, and dislikes, is the need to settle their debt. And nobody would want to hear that.

Homeowners also complain that lenders usually explain in a language they do not understand.

But with the help of a foreclosure counselor, the homeowner will hopefully listen to someone who appears trustworthy. The foreclosure counselor would also want to mediate the gap between the lender and the homeowner.

Foreclosure counseling may be worth $30- $125.

The task force would want this to be mandatory, but banks would only agree if they do not have to shoulder the whole burden of the counseling fee.

The survey that will hopefully find a way to avoid more foreclosure is expected to be completed mid-July.

A New Task Force to Help More Owners Avoid Foreclosure is a post from StopForeclosuresHelp.com - Learn how to stop foreclosures.