Congress is finally waking up

 Reposted from loanworkout

It finally looks like members of our congress finally realize that the Hope Line, AKA 995-Hope, operated by Neighborhood Works, is not a cure all for distressed homeowners.

In fact, many who call the Hope Line are in need of legal assistance. HUD trained counselors who operate these phone lines, do not have the legal savy or mortgage skills to properly serve borrowers that have been victimized by predatory lending, mortgage fraud or in need of foreclosure defense or eviction assistance.

A 3 day HUD class just does not cut the predatory lending and mortgage fraud mustard.

In now way am I bashing these great people who pay it forward every day and are performing a great service in their communities. I support all of you. I just do not agree with how the Hope Line is operated and how every homeowner is directed to a counselor, when many just need an attorney. 

Their attempts to be of service can actually be an extreme disservice to homeowners who really do not need hope. They need a lawyer!

I have been writing about this for quite sometime and it’s finally nice to see House panel members have either been reading my blog or have caught on to this serious loophole in the foreclosure prevention efforts thus far.

Housingwire:

Early debate from House panel members on Thursday morning focused on counseling requirements, with local lawmakers suggesting that more Federal funds would need to be appropriated for troubled borrower counseling — some House representatives even argued that new Federal funds were needed to fund consumer attorneys who would defend homeowners against foreclosure and eviction actions.

“These people are at the mercy of the lender and servicers in this case,” said Rep. Melvin Watt (D-NC). “They don’t have the legal background that the lenders have needed to defend themselves.”

Watt said consumer counseling doesn’t help borrowers completely, and that he wanted funds appropriated from the Neighborhood Reinvestment Corp. to fund the defense of foreclosure and eviction actions.

Frank voiced supported the proposed amendment as well, in a heated exchange between Housing Republicans and Democrats that set off what is expected to be over a weeks’ worth of discussions covering FHA reform.

“Some legal work is necessary,” Frank said. “The emphasis here is on legal work, not advocacy work.”

I am glad to see the shift towards proper legal help for the thousands of homeowners on the street that need this assistance. But there in one HUGE problem guys. There are not nearly enough properly trained lawyers who understand mortgage law and foreclosure defense to properly help all the victims.

A national mortgage law and foreclosure defense training program for interested attorneys should be implemented right away. However, my guess is this project will not get the tens of millions that the Hope Line gets. In fact, I think they will not donate one dime to help lawyers sue them.

My guess is $10-20 million thrown at lawyer foreclosure defense project will yield billions in predatory lending lawsuits and settlements for consumers. It actually could put the final nail in the coffin fro the remaining banks left. Will congress let his happen? Will the banks allow congress to let this happen? I’m not holding my breath…………