Lawsuit Seeks to Block Home Foreclosures in Minn.

A group seeking to stop home foreclosures in Minnesota sued the federal government Tuesday, saying a program meant to help struggling homeowners refinance their mortgages fails to give them proper notice or the right to appeal when they're rejected.

The Home Affordable Modification Program, set up earlier this year, reduces monthly mortgage payments for at-risk borrowers. The Obama administration has set aside $75 billion for the program to try to prevent 3 million to 4 million foreclosures.

But Mark Ireland, an attorney with the Foreclosure Law Relief Project, said the government has failed to establish clear procedures.

''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.''

The lawsuit, which seeks class-action status, was filed in federal court in Minneapolis. It asks for an injunction against all foreclosures until the federal government puts safeguards in place.

Ireland said the group hopes housing advocates in other states file similar lawsuits.

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