The lack of responsiveness from lenders when dealing with requests for home loan modification requests has prompted two U.S. Senators to propose the creation of a new “Office of the Homeowner Advocate”. The proposal has the support of the White House, but next to no support from members of the financial industry. The Office of the Homeowner Advocate would fall under the jurisdiction of the U.S. Treasury Department and would give homeowners an opportunity for recourse when mistakes, errors, illegal practices, and unresponsiveness by lenders causes a home to fall into foreclosure. Homeowners who feel that they have been unfairly treated by their lender would also have an office within the federal government to file complaints with.
The problem with creating a brand new office within the federal government to handle complaints related to lenders and requests for home loan modifications is that the office will most likely fall victim to the same type of bureaucratic red tape that affects so many offices of government. With so many home loan modifications being processed and requested every day, the red tape is almost guaranteed. Another problem with the creation of the Office of the Homeowner Advocate is that the plan has not yet been approved.
For borrowers who feel they have been unfairly treated by their lenders after submitting requests for home loan modifications, waiting for the creation of the Office of the Homeowner Advocate may be out of the picture. An attorney should be consulted so that the facts of the case and request for modification can be reviewed by a legal expert to determine whether or not unfair treatment exists and cause for legal action would be warranted. Even if the proposal of the two Senators is approved by Congress and the Office of the Homeowner Advocate is created, homeowners are still advised to consult with an attorney who can dedicate time and effort to a case instead of having to rely on the help of government employees who are paid on salary and have no real motivation to help homeowners other than keeping good statistics up and bad statistics down for their office. An attorney can provide one on one guidance, assistance, and attention to clients that the federal government can’t. In the amount of time that it may take the government to respond to an allegation of lender fraud or abuse, an attorney could just as easily have used their knowledge and expertise to compel lenders to respond to and settle borrower complaints.