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According to a report issued by the court-appointed monitor of the multi-billion dollar national mortgage settlement, four out of the five large banks involved have failed to comply with at least one of the measured requirements delineated within the settlement.

The $25 billion settlement - which was agreed to last year following countless allegations of mortgage abuses by the nation's five largest mortgage servicers - was supposed to assist beleaguered homeowners with loan modifications and other forms of assistance.

However, the recent report indicates that the monitor discovered that four banks have violated at least one of the metrics used to track compliance with the national settlement. Specifically, the most common violation was the failure on the part of the banks to promptly notify homeowners of missing documents in their modification applications - which under the terms of the settlement the banks were obligated to do within five days.

In fact, the New York Times reports that a review conducted by the Attorney General of Illinois, Lisa Madigan, found that banks failed to timely notify loan modification applicants of missing documents in 60 percent of the requests reviewed.

Sadly, if these allegations prove to be true, several of the banks have work to do if they want to meet their obligations under the national mortgage settlement.

Bankruptcy may be able to help

Unfortunately, these recent reports merely illustrate the continued struggles homeowner face when dealing with mortgage servicers. However, homeowners currently dealing with late payments and possible foreclosures need to know that several options are available besides loan modifications.

For instance, bankruptcy can often provide protection for a homeowner going through foreclosure. Not only will filing a Chapter 7 bankruptcy automatically stop all foreclosure proceedings, but it will give the homeowner the ability to fight the bank in court. And, even if the homeowner loses to the bank in court - and thus loses the home - the additional time attributed to the process often allows a homeowner to improve his or her credit score. Consequently, an improved credit score means the homeowner may now qualify for financing on another affordable home.

However, it is important to note that every situation is different, which is why it is generally best to seek to the counsel of an experienced bankruptcy attorney if facing foreclosure and think bankruptcy may be the answer. A knowledgeable attorney can review the facts of the case and help recommend the options that may be best given the circumstances.

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