USA Today Op-Ed
By Julia Gordon, CRL Senior Policy Counsel
julia.gordon@responsiblelending.org 202-349-1878
For years, mortgage loan servicing companies have engaged in shoddy business practices, ranging from misapplied payments to evicting homeowners who have never missed a payment. Now employees of these companies have admitted to falsifying thousands upon thousands of affidavits used to toss families out of their homes.
The fraudulent documents indicate a problem well beyond the "technical glitches" that the industry describes. If servicers had accurate records, there would be no need to invent paperwork. The entire system is rife with unfairness, and the mistakes and omissions have serious consequences in terms of unnecessary or even mistaken foreclosures.
Foreclosures devastate the family losing their home, but they also decrease the value of nearby homes, harm neighborhoods through vacant homes and increased crime, and reduce the local tax base. What's more, with more than 2 million homes already in the foreclosure process and almost four million more mortgages in trouble, too many foreclosures could hinder or even reverse our national economic recovery.
Not every foreclosure can be avoided, but many evictions aren't inevitable or necessary. No homeowner should have private property taken from them wrongfully. No family should lose a home before having a chance to be considered for a plan that would allow them to keep paying on their mortgage.
To avoid chilling the housing market through uncertainty about whether foreclosures have proceeded legally, lenders should temporarily suspend foreclosures until they can ensure a fair and honest process. Then, judges should approve only those foreclosures where the proper steps have been taken and alternatives considered.
Now that the curtain has been pulled back to reveal a fundamentally flawed foreclosure system, we cannot avert our eyes and return to business as usual. There is no reason to believe that these problems are limited to 23 states or to just a few lenders and servicers. It's time to make sure mortgage servicers do right by America's homeowners, neighborhoods, and housing market.
For more information: Kathleen Day at (202) 349-1871 or kathleen.day@responsiblelending.org; Ginna Green at (510) 379-5513 or ginna.green@responsiblelending.org; or Charlene Crowell at (919) 313-8523 or charlene.crowell@responsiblelending.org.