Defaulted mortgages and foreclosures have garnered the majority of headlines concerning the downfall of the American real estate market. But many homeowners who have kept up their mortgage payments have found themselves struggling to accommodate banks during modification processes, largely due to bank errors.

Cincinnati foreclosure attorneys note that some homeowners are now finding themselves in hot water with their banks as they attempt to perform loan modifications like restructuring sub-prime loans. This latest development is hampering the country's efforts to recover from the housing crisis and aid homeowners struggling to accommodate the changed housing landscape.

One particular instance receiving national attention is a homeowner who has been trying to refinance a sub-prime loan with Bank of America. The loan, which was issued in 2004, was initially rejected because certain paperwork required to process the application was not provided to the bank as requested.

The only problem was that the bank never requested the documents. A second attempt to process the application resulted in another rejection, this time based on two calculations made by the bank. These calculations were later found to be incorrect.

Meanwhile, the homeowner's standing with the bank has dropped without reason. Despite keeping up to date on monthly payments, the bank recently sent the homeowner a letter to explain that the bank would be moving forward with foreclosure proceedings.

Many more homeowners are dealing with similar difficulties as they try to make modifications to home loans. Settlements between certain banking institutions and their customers are currently being discussed.

Source: Reuters "Modification blunders bedevil U.S. housing recovery" Dec. 19, 2011