Outreach Housing LLC Cautions Homeowners Against Waiving Rights in Loan Modification Programs

As the Bush Administration unveils a potentially extensive new program to modify mortgages, one organization remains skeptical -- and urges distressed homeowners to proceed with caution.

Outreach Housing LLC (http://www.outreachhousing.org/), a service provider that has assisted over 8,500 homeowners to preserve their equity interest and credit since January of this year, says the government's plan to protect three million borrowers from foreclosure sounds good, except for one thing: The major lenders and the government agencies that are hopping on the loan modification bandwagon are the very ones who, through shoddy lending practices, created this mess in the first place.

'Most of the major lenders have promoted defective mortgage products that are doomed for default,' stated Outreach Housing director Blair Wright. 'This debacle has come at a cost of over 700 billion in hard dollars, plus the equity write-down of middle American homes that are simply exposed to these deteriorating markets. The total cost is several trillion and now these same lenders are modifying homeowners' loans with the complete waiver of the borrower rights to any defense or counter claim.'

So why not automatically sign on the dotted line for any loan modification a lender proposes? It comes down to a track record of mistakes and outright deceptive practices. In analyzing its clients' settlement documents, Outreach Housing has found that 60% of home loans carry strong Real Estate Settlement Procedures Act (RESPA) and Truth-in-Lending Act (TILA) violations, which have included lender fraud and/or predatory lending committed by the lender. Lenders eager to cover up wrongdoing are likely to offer modifications that include clauses releasing themselves from liability and removing all of the borrower's defense, claim, counter claim, or any other defense against the lender should a lawsuit or foreclosure occur.

'Most times the mortgage and note modification agreements require the homeowner to waive his or her rights in-whole,' Wright explained. 'Simply stated, modification programs offered by the major institutions -- which are appearing to participate in aggressive homeowner preservation programs -- are actually gaining unsuspecting homeowners' agreement to waive all defenses, claims or rights against lenders and their past violations.'

Outreach Housing says homeowners need to know their rights. By analyzing and investigating lending inaccuracies, a homeowner can hold a mortgage company accountable for violations identified -- but only if the homeowner has not inadvertently agreed to release a lender from liability in a loan modification.

About Outreach Housing LLC

Outreach Housing is a grassroots organization helping homeowners fend off aggressive mortgage lenders and defend themselves against erroneous lender practices. The organization's nationwide teams of loss mitigation experts, mortgage analysts and attorneys provide lending-industry victims a defensive solution that enables them to avoid foreclosure and keep their homes. Learn more at http://www.outreachhousing.org/.

Contact:

Blair Wright
Director, Outreach Housing LLC
888-GO-OUTREACH
bwright@outreachhousing.org
http://www.outreachhousing.org/

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Source: Outreach Housing LLC

CONTACT: Blair Wright, Director of Outreach Housing LLC,
+1-888-GO-OUTREACH, bwright@outreachhousing.org

Web site: http://www.outreachhousing.org/