Group Files Lawsuit in Minnesota to Stop Foreclosures

A Minnesota watchdog group has filed a lawsuit against the federal government claiming that a program that was designed to assist struggling homeowners did not have sufficient guidelines to aptly help the public.

The Foreclosure Law Relief Project also said that the Home Affordable Modification Program failed in its purpose because the government didn't set up proper procedures. This left some homeowners in the program to not get proper notice or the right to appeal when they were rejected.

Mark Ireland, an attorney with the group, said the government made its decisions in secret, the New York Times reported.

"The government does not require its loan servicers to tell a homeowner the specific reason why they have been denied a loan modification,'' Ireland said. ''Decisions are made under a cloak of secrecy and there is no formal way to challenge these decisions."

Initially, the program was set up to reduce monthly mortgage payments for at-risk borrowers and had $75 billion from the Obama administration to prevent approximately 4 million home foreclosures.

The lawsuit was filed in a federal court in Minneapolis and reportedly asks for an injunction against all foreclosures until the federal government puts appropriate safeguards. Ireland added that he hopes other state follow the group's example.