The plan enacted by three Rhode Island cities to prevent foreclosures and ease their impact on homeowners, has had little effect. The plan involved requiring lenders to try mediation procedures before pursuing a full foreclosure initiative have helped only a small percentage of Rhode Island homeowners struggling with debt.
The most recent statistics released by Rhode Island Housing reported that a large proportion of the 4,676 homeowners targeted for assistance in the cities of Providence, Cranston, and Warwick did not respond. In fact, in 2,296 cases, certificates were actually granted to lenders permitting them to proceed with foreclosures due to a lack of response from the indebted homeowners.
Indebted Homeowners Stop Fighting Foreclosure
Representatives from Rhode Island Housing claim that the lack of success is due simply to the majority of struggling homeowners who are just not bothering to fight foreclosure. Statistics demonstrate that a majority of those who actually responded were, ultimately, helped.
Of those who replied, 277 homeowners had foreclosures cancelled by their lender, 101 were working with HUD-approved counsellors, and 251 had verbal settlements in process. An additional 36 received trial mortgage loan modifications, 97 received permanent mortgage modifications, and 28 obtained forbearance agreements. Only 18 participants in the program received no benefits whatsoever, with an additional 39 finding foreclosure to be their only option.
The program was founded in a government effort to help struggling Rhode Island homeowners. Rhode Island is currently one of the hardest hit states by unemployment, and has one of the highest proportions of foreclosed homeowners and those facing threat of foreclosure.