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Consumer groups push states to strengthen foreclosure prevention

Report: Servicers should be required to consider alternatives

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States should require mortgage servicers to negotiate loan terms with borrowers to prevent foreclosure and allow borrowers to pause a foreclosure sale should the servicer violate that requirement, two consumer advocacy groups said in a report released today. The Center for Responsible Lending and Consumers Union said their recommendations would close gaps in foreclosure safeguards left by new federal mortgage servicing rules from the Consumer Financial Protection Bureau and by last year's national mortgage settlement among 49 state attorneys general, federal officials and the five biggest mortgage servicers. "Despite these recent advances, millions of families remain poised to lose their homes. There is room for states to build on these reforms and help avoid unnecessary foreclosures," the report said. "Over the last several years, some of the most significant problems have included the failure to review homeowners for a loan modification and foreclosing on borrowers even as th...