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announced the Home Affordable Modification Program, in March 2009, to help an estimated 4 million homeowners avoid foreclosure. Under this program Wholesale West Virginia Mountaineers Hats , mortgage servicers will earn fees to help homeowners facing foreclosure reduce their monthly mortgage payments. The mortgage servicers are the only link between borrowers and banks or investors and therefore they are in the best position to modify the loans under this new program. The objective is to adjust mortgages so homeowners payments remain affordable.

But, in a proverbial sea of exploding adjustable rate mortgages that homeowners cannot afford, only about 200,000 mortgage loan modifications are under way. The mortgage servicers don?t have enough financial incentives to modify the mortgages as they only earn on average of ? to ? percent of the value of the loans they service. Added to this is their natural incentive to keep costs down by understaffing their loan modification divisions and their customer service divisions.

The larger the mortgage payment, the more the mortgage servicers earn, and they earn less if the loan is modified Wholesale Wisconsin Badgers Hats , which frequently involves lowering the interest rate or taking other steps to reduce monthly mortgage payments.

An analysis by the Associated Press shows that of the 38 servicers that are being paid by the government as part of the federal loan modification program, 30 are facing lawsuits for charging illegally high fees, prematurely foreclosing on homes and engaging in illegal collection practices. These are violations of laws protecting homeowners in foreclosure and laws that prevent credit reporting and debt collection abuses. Fourteen of these companies have suits against them for misleading homeowners about their eligibility for the loan modification program and how much their new monthly payment might be. Some are even accused of having advised homeowners to not make mortgage payments to increase their chances of qualifying for modifications, and then foreclosing anyway.

Part of the problem is that there is little regulation of the mortgage servicing industry and therefore there are significant abuses that go unchecked. During the housing boom these servicers started bidding for business to collect from people less likely to make timely payments, and started profiting, as late payments became a reality. Now Wholesale Alabama Crimson Tide Shirts , however, they are realizing that they bid more than they can expect to recover from a pool of loans and therefore new charges, overcharges or other abuses have become more prevalent.

For California consumers, if you believe you have been the victim of unfair credit reporting, unfair debt collection practices