Big financial institutions continue to foreclose on troubled borrowers in error -- either while a homeowner is awaiting a loan modification or because of fees incorrectly added to the seizure -- according to a national survey of attorneys representing borrowers.
One intent of the recent $25-billion mortgage settlement among attorneys general, the nation's five largest mortgage servicers and certain federal agencies was to do away with such errors, but in recent weeks consumer advocates have raised concerns that borrowers who are in the foreclosure process may still be harmed.
More than 80% of the attorneys surveyed said they had in the last year represented a borrower who was awaiting a loan modification but a foreclosure sale was attempted.
The same percentage of attorneys said they represented a borrower who had fees improperly assessed on their home by banks while they were in foreclosure.
The survey was the result of interviews of 260 consumer attorneys in 45 states, conducted by the National Consumer Law Center and the National Assn. of Bankruptcy Attorneys this month. For the full results of the survey click here.