SEATTLE, Wash. - As more Washington families struggle to pay their mortgages, there's growing concern that they're not getting enough help, from either the government or from lenders. In Seattle, attorney David Leen, who specializes in consumer-protection law, says he's receiving more calls from people who have asked their banks or mortgage companies for loan modifications, but have gotten no response. He knows lenders are swamped, but says he isn't seeing many modifications taking place, and some companies are even using the situation to make money.

"Some lenders are trying to capitalize on this problem, and they're charging people large quantities of money - five, six, seven thousand dollars - to delay a foreclosure while they continue the modification consideration. And I think that's very unfair and improper."

Leen says one problem is that lenders are not required to modify their customers' loans.

"There may be some incentives for them to do modifications through the government subsidies, but the average consumer doesn't know how that works, or what recourse they might have if the lender doesn't follow through with a modification."

A bill in Congress would have allowed bankruptcy judges to order modifications... but it was killed in the Senate, when the banking industry said it could raise interest rates for all consumers. Leen says it's not that the banks want to take more houses, but that they're hesitant to write loans that they can't make a profit on.

He says it's important to get legal advice if you intend to stop making loan payments - or under other circumstances.

"If you have more than one loan on your property, you want to make sure that if you stop making the payment on the first, the second doesn't turn around and sue you. If you're considering a short sale, a bankruptcy, a modification - a lawyer can usually give you some advice about the consequences of taking these various avenues."

Leen is convinced that the foreclosure problem will worsen over the next two years, as more adjustable-rate mortgages automatically re-set, leaving people owing more than their homes are worth.
The State of Washington has just launched a Home Foreclosure Legal Aid project, training attorneys as volunteers to help homeowners in crisis. The phone number is 1-877-864-HOME (4663).

Information is also online at www.homeownership.wa.gov