Congress passed the in 1977 with to reduce discriminatory credit practices. At the time the unethical practice called "redlining" was prevalent. The federal law required mortgage lenders, loan issuers and commercial banks to change their behaviors in order to better assist all people, regardless of their income level or location.

Current Foreclosure Trends

Despite the Home Affordable Modification Program, the foreclosure rate is still too high for the overall sake of economic recovery. Currently, minorities are experiencing the greatest foreclosure rates in the nation.

Another upsetting trend is that not all foreclosures have been legal. Disorganization behind the scenes of major banks has been contributing to the unsettling trend. Kevin Stein, associate director of the California Reinvestment Coalition stated "We believe in many cases people are losing their homes when they should not have," and internal communication failures and misleading paper trails are the biggest culprits.

The reoccurring theme causing the activity involves a 'he said, she said' scenario. Distressed homeowners who have been contacting their lenders directly to see if they can get help to avoid foreclosure have been getting conflicting advice from employees within the same company. The misinformation has been known to cause errors and lead to an illegal foreclosure.

Tips to Prevent Foreclosure

It may take some time until any changes to help stem foreclosures are implemented. Until then, consumers need to consider their options wisely including:

• Mortgage Refinancing: Crunching the numbers will help you determine if this strategy is wise. Only homeowners up-to-date on mortgage payments and with good credit histories need apply. If approved, homeowners can save hundreds and even thousands of dollars on their mortgages.
• Bankruptcy: Chapter 13 bankruptcy is a drastic move that will require consumers to reorganize their finances and pay back their debt. Candidates need to have income to meet the repayment plan. The move will damage your credit history for up to seven years.
• Make Home Affordable Program: The government backed mortgage relief plan is not a perfect response to the foreclosure crisis, however it is what we have. Qualified consumers will get the refinancing opportunities they need to lower their mortgage payments.
• Short Sale: Despite the name, short sales are anything but! The process requires the homeowner to work directly with their lender in order to get them to accept a sales price that is smaller than what is actually due on the loan.