February 13, 2009 13:28 ET

Lenders Frustrate Homeowners' Efforts to Renegotiate Mortgages

PHOENIX, AZ--(Marketwire - February 13, 2009) - While the federal government has been encouraging mortgage lenders to institute and expand mortgage loan modification programs to help distressed homeowners avoid foreclosure, Think Debt Relief says homeowners are encountering so many roadblocks in their attempts to actually modify their mortgages, many are losing their homes anyway.

"The average American trying to negotiate a loan modification will not be able to get it done," said California Congresswoman Maxine Waters, after spending two hours on the phone with a lender, trying to get through to its mortgage mitigation department. She was calling on behalf of a constituent as part of a "Nightline" investigation.

"It will be impossible for them to get in touch with the right person, and even if they get in touch with a so-called counselor, they have a cookie-cutter kind of direction that they can go in," Waters added.

Homeowners attempting to contact their lenders' loan modification departments are reporting horror stories of repeatedly being placed on hold, disconnected, transferred from department to department, and shuffled between their lender and their servicer without ever making any progress on getting their mortgage renegotiated.

Los Angeles couple Carol and Dave Harper are behind on their mortgage and have attempted to modify their home loan with government-owned lender IndyMac, but they told "Nightline" that their repeated phone calls and multiple visits with bank counselors have resulted in nothing more than a six-month runaround. "I've been on the phone so much, it's pathetic," Carol Harper said. "I'm at a point where I don't know where else to go."

For the 45,000 borrowers who feel similarly desperate and are seeking a workout under a mortgage modification program with the FDIC, results have been equally discouraging: Only 8,500 homeowners have had their home loans restructured so far. And the Hope for Homeowners initiative passed by Congress in July, which was expected to help 400,000 homeowners refinance their home loans and avoid foreclosure, has only refinanced 350 loans so far. The FDIC estimates that another 3.8 million mortgages will be 60 to 90 days past due by the end of 2009.

About Think Debt Relief

Think Debt Relief, www.ThinkDebtRelief.com, is an experienced debt relief company offering mortgage loan modification programs, credit counseling services, and a debt settlement program that serves as an alternative to long-term and costly debt consolidation plans.