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Are foreclosures happening too often to Virginia homeowners?

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RICHMOND, Va.  (WTVR) - Are so-called wrongful foreclosures happening to often to homeowners in the Commonwealth?

One state delegate says yes, and that he’s fighting to put an end to it.

Delegate Bob Marshall says he’s working on targeted legislation that could curb the problem of dual tracking. That’s when lenders continue to pursue foreclosure even when a homeowner is in the middle of a loan modification to have their monthly payment reduced.

Marshall cites a recent study that revealed 87 percent of housing counselors in Virginia said their clients were foreclosed upon even though they were in the middle of a loan modification.

Housing experts tell us they’re glad to see several bills in the General Assembly that address this issue.
Here’s what the bills would do.

House Bill 822 would prevent foreclosures while homeowners are working through a loan modification process.

House Bill 821 would create a civil action for people wrongfully foreclosed upon, allowing them to recoup damages and attorney’s fees.

There’s also a Senate bill that tackles the issue. Senate Bill 163 would make using false records and statements in a foreclosure fraud, allowing victims to recoup damages and attorney’s fees.

While housing advocacy groups applaud the legislation, not everyone thinks it’s necessary. We spoke with the President & C.E. O. of the Virginia Bankers Association who doesn’t support the legislation.

Bruce Whitehurst tells us in the past year there has been a federal focus on this issue and stringent guidelines have been implemented on the federal level to deal with dual tracking.

He says one of the most helpful changes centers on homeowners being given a single point of contact when dealing with their lenders.

Whitehurst says that wasn’t in place a year ago. He says when homeowners contact their lenders; they are now to be given a specific person who is assigned to their case. That person then handles the case until the homeowner is approved for a loan modification or perhaps a refinance.

Housing advocacy groups like Housing Opportunities Made Equal say the legislation is sorely needed.

“We have homeowners who have had fraudulent signatures on their documents,” said Ali Faruk.

“We all have heard about the robo-signing that went on. So, we need to just make sure the homeowner and this process is protected.”