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Single Point Of Contact: Why Won't Banks Pay More Attention To Homeowners?

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WASHINGTON -- Tim Collette's son Aaron will get back from Iraq on August 19. On August 9, his bank, JPMorgan Chase, is taking his house in Bend, Ore. -- unless Collette can get a mortgage modification first. But unlike innumerable other borrowers in similar situations, Collette now has a pretty good shot at getting one.

Collette first asked his bank for help in 2008 when his work as a home flooring expert slowed down dramatically. The result was a disaster. He said the bank told him he had to miss payments to qualify for help. When he missed the payments, the bank began pursuing a foreclosure. One day someone from Chase would say one thing, the next, someone else would say something completely different.

The process got a lot easier last week when Chase assigned a single person to follow Collette's case and handle every single interaction he has with the bank.

"I have a single point of contact now," Collette tells HuffPost. "That's a very good change of events. I'm very pleased. My son's happy too."

"Single point of contact" is a policy homeowner advocates have wanted for years. Ever since the housing bubble burst, banks have seemingly gone out of their way to lose homeowner paperwork, generally failing to track struggling borrowers' modification applications from one month to the next. Dozens of homeowners have told HuffPost over the past two years that every time they call their bank about their modification, they reach a different employee who has a different set of facts about the case. And the facts are critical facts: One employee will say a modification has been approved, while another will say the home is going into foreclosure.

But in the rare instances in which borrowers have a single point of contact with their bank, the foreclosure relief process involves far less anguish and results in a lot more loan modifications.

"It definitely makes a big difference," says Linda Ingram, Director of Foreclosure Intervention at Beyond Housing, a homeowner counseling agency based in St. Louis. "You're not calling into La La Land with someone who maybe got the job yesterday and doesn't know how to read the system or follow their notes."

Some more aggressive housing counselors have been able to secure a single point of contact for the borrowers they work with. In Ohio, a group called Empowering and Strengthening Ohio's People (ESOP) gets a single point of contact for every single borrower they work with. Why? ESOP, whose official logo bears the slogan, "Fight back, move forward," began as a community organizer outfit, using protests and other direct action to pressure banks into helping troubled borrowers.

"A lot of homeowners come to ESOP after having tried to work with the banks on their own," says ESOP housing counselor Rachel Bloch. "Without the single point of contact, nobody seems to know what's going on. The left hand doesn't talk to the right hand. And with a single contact, the homeowner doesn't have to deal with that . . . I can get answers literally immediately because I talk to the same people all day long. I don't have to go through all these different channels."

After years of wrangling, Chase gave Collette a single point of contact last week. Sen. Jeff Merkley (D-Ore.) has been personally championing his case, and his situation was recently written about in HuffPost.

All of this raises an important question about the foreclosure industry. Why can't more homeowners get the same customer service Collette's getting?

"Whatever I can accomplish ought to be something they can do for other people," Collette says. "This special coverage I'm getting should not entitle me to a special deal."

In response to a query about Collette's case, Chase spokeswoman Christine Holevas said that the company began implementing a single point of contact policy nine months ago, but acknowledged that the process is "still evolving." Holevas says Chase is committed to making sure that its interactions with homeowners are "better, faster, more efficient for borrowers and for us."

Housing counselors are still frustrated with Chase and other banks.

"I've had a single point of contact with Chase occasionally," says Ingram, the St. Louis housing counselor. "That is not a consistent occurrence."

"Regular borrowers that call in ... they will get whoever is in the queue -- there is no guarantee that they will get the same representative when they call in again," says TaDeo Johnson, a housing counselor with the Center for NYC Neighborhoods. Johnson specializes in "escalating" cases for other housing counselors who are getting the runaround from banks in the foreclosure process. He has his own single point of contact who works out cases specifically on his behalf. When other counseling agencies feel like they've hit a wall with the bank, they go to Johnson.

Requiring a single point of contact for every borrower will not solve the nation's foreclosure problem on its own. The policy can only help homeowners facing an accidental foreclosure -- one where a bank really, truly does not want to foreclose, but winds up processing because of a botched modification process.

But single point of contact would make a big difference, which is why it's the centerpiece of foreclosure reform legislation currently being sponsored by Sen. Merkley. The bill is currently going nowhere on Capitol Hill in the face of heavy Wall Street lobbying.

Bank regulators have long been aware of the problem. In April, with the looming threat of big penalties from state attorneys general investigating foreclosure fraud, banks struck a deal with the Office of the Comptroller of the Currency, which is responsible for overseeing the nation's largest lenders. The OCC issued an official enforcement action that included no financial penalties, but ordered banks to give all borrowers a single point of contact within 120 days.

Banks were required to submit a formal plan to the regulator within 60 days, explaining how they would grant that single point of contact. The 60-day window was supposed to expire on June 13, but the regulator postponed its enforcement action for another 30 days.

Merkley doesn't think the OCC order will be effective. "It's essentially voluntary," he said in May. "It essentially says, 'Please do these things.' And the servicer can hire their own person to check on how they're doing. It hardly hardly constitutes a strong step forward." (The OCC strongly disagreed with his characterization of the order.)

In the meantime, Collette is pushing lawmakers in Oregon to enact statewide reforms enabling other homeowners like him to get help.

"We had a press conference yesterday at the Capitol in Salem," Collette says. "This is definitely not about me ... I'd like this to set a precedent."

He also says that the progress on his mortgage has made things a little easier for his son. "I just talked to him Sunday morning at 2:00 am for Father's Day. His squad got hit with another IED and two grenades, but he's okay ... I'm glad he doesn't have this on his mind. For these soldiers, that can cost you your life."

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