Report cites flaws in foreclosure prevention effort, sees new wave of defaults

The high level of foreclosures plaguing the country will get worse before it gets better, according to report issued Wednesday by state regulators that found that mortgage relief being offered to distressed borrowers is not keeping up with the need. The country is at "risk of a devastating acceleration of foreclosures unless improvements are made in foreclosure prevention efforts," according to the report by the State Foreclosure Prevention Working Group, which is made up of 12 state attorneys general and three banking regulators. The report found that the number of borrowers falling into trouble on their mortgages exceeded the number of borrowers able to tap into a federal mortgage assistance program. The foreclosure relief process appears to be backlogged, with some mortgage servicers taking six months to complete a loan modification, according to the report, which includes data from 13 large mortgage servicers...read more