The mortgage calamity has dealt people like Jim Halbert a losing hand. Mr. Jim Halbert of Houston, Texas, lost his job as a mortgage underwriter for a now defunct Houston based Aegis because of the housing crisis. Now he is about to lose his home after spending all of his savings on house payments while he has been unemployed. That’s not the worst of it; Jim has recently been diagnosed with leukemia.

He did exactly what lenders tell borrowers facing foreclosure to do: Call the lender for help and work something out before the situation becomes hopeless. And his lender told him they couldn’t help because his payments were up to date. Thankful he had savings to make payments with; he has received a notice of default that he is now in danger of foreclosure. Since he has no job, he can’t make the payments. He’s not a good candidate for any of the programs available for folks facing foreclosure.

He’s not alone by far. Many homeowners struggle to find that they don’t qualify for the national programs available to help troubled borrowers. The Center for Responsible Lending, a non-profit research company estimates that the government born plan called Hope Now Alliance, will be able to help only three percent of troubled homeowners with subprime adjustable-rate mortgages facing foreclosure.

“Too many entities are involved – investors, homeowners, and loan servicers. Most home loans were packaged as bonds and sold as investments on Wall Street. Loan servicer interests, who collect payments and service loans on behalf of investors, conflict with those of the borrowers,” according to the Houston Chronicle report. For example, investors have to give permission to the loan servicers in order to modify the mortgages, and different firms have varying policies. The worst part is that the owners of many of those loans sold to investors can’t be traced back to the originator.

Recent legislation proposals sound good. But by the time a bill passes both the House and Senate, and then on to the President for approval, how many homeowners will fall through the cracks of these well meaning but slow-as-slugs entities that promise help is coming?

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