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No end in sight to foreclosure woes in Washington

The Mortgage Forgiveness Debt Relief Act expired Dec. 31, though Congress could still retroactively file an extension. There are countless states struggling with what the expiration will mean for its residents, including Washington. Many residents across the nation have already lost their homes to foreclosure and sold off all their assets, some due to no fault of their own.

Most would argue that, even though the stock market ended the year on an uptick that has not been seen in recent years, the economy is still struggling, and consumers are still having a hard time making ends meet. Those who own their homes find themselves in a difficult position. Many of them applied for a mortgage that was serviced by a particular company that has since been found guilty of misconduct. As with many other companies who have been found guilty of similar behavior, this particular company charged unauthorized fees to its borrowers, denied loans to borrowers who were qualified and refused loan modifications for no reason.

As part of the $2.1 billion settlement that the company has been ordered to pay in mortgage principal reductions, some $49 million of that is destined for Washington state homeowners. That amounts to about $1,000 per family. For the over 3,500 homeowners who have been foreclosed on, it may well seem less like a settlement and more like an insult.

Each time one of these loan servicing agencies is ordered to rectify the problems it has created, it is a victory for consumers. The problem is that the damage is so widespread, and so many consumers were affected, that the compensation is not nearly enough to truly make up for the damage each family has endured. Many Washington homeowners have had to go through foreclosure, and many others are barely hanging on to their homes, living month to month. However, there are other options that homeowners might consider under state law that may offer financial relief -- including filing for bankruptcy.

Source: blog.seattlepi.com, Feds, states order mortgage servicer Ocwen to pay $2.1 billion to settle charges of misconduct, Rita R. Robison, Dec. 19, 2013

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