Have a complaint about the bank managing your home loan? Joseph Smith, the former North Carolina banking commissioner charged with enforcing the national mortgage settlement, would like to hear it.
On Thursday, Smith announced the launch of an online tool for attorneys and other advocates to report their clients' mortgage servicing complaints. There is also a tool for homeowners to lodge a complaint directly.
“This allows me, as monitor, to hear complaints and learn more about advocates’ impressions of how the settlement is working," he said. "Although I’ll extensively review reports and monitoring from the banks and my own team of auditors, it is still critical for me to receive information from the heart of each community this settlement serves.”
While filing a grievance may help the settlement's top enforcer keep an eye on the banks -- Bank of America, Wells Fargo, Citigroup, JPMorgan Chase and Ally Financial -- Smith does not have the power to investigate individual complaints or help homeowners. This speaks to the limitations of the mortgage settlement, which expires in three years and was never intended to give individual homeowners an opportunity to have their appeals for help directly heard.
Under the settlement, banks pledged to overhaul how they manage troubled loans. That includes eliminating "dual-tracking," the practice of banks pursuing foreclosure proceedings against homeowners who are at the same time seeking a trial loan modification. Financial institutions must also establish a single point of contact for troubled borrowers -- a response to widespread complaints from homeowners that when they called for help, they never could speak to the same person twice.
Homeowners' biggest complaint over the past few years is the lack of response from banks and the government to their claims about wrongful fees, misapplied payments and botched foreclosures.
In an interview late last year, one elderly borrower near Baltimore told of sleepless nights and a worsening of medical problems due to stress caused by dealing with his bank, which he claimed was foreclosing based on faulty loan calculations. No one at the institution or in the government would hear his pleas, this borrower said.
Another homeowner in distress recently emailed The Huffington Post, desperate to save her home. "CAN ANYONE HELP US?" this California homeowner wrote. "Or are we going to be like other seniors we have seen lose their home who now live in vans, or push grocery carts on the street with what they can save to live on, sleeping on the street?"
But while the mortgage settlement monitor can't help, the federal government has created two other avenues for borrowers to appeal for direct assistance.
The simplest is to lodge a complaint with the Consumer Financial Protection Bureau. That agency promises to forward a grievance to the financial institution, assign it a tracking number and keep borrowers updated on the status. What's not clear is how often the agency intervenes on a borrower's behalf.
For borrowers whose homes were in some stage of foreclosure in 2009 or 2010 there is the Independent Foreclosure Review. The program, agreed to by 14 loan servicers as part of consent decrees signed with regulators last year, is designed to give borrowers a chance to have a loan file reviewed by an impartial third party if the mortgage was involved in any stage of foreclosure from 2009 to 2010 -- and they believe that they suffered financial harm. (So far, just 3 percent of eligible borrowers have applied).
Smith will use the information gathered from these recorded complaints to investigate any notable trends, he said.
“Lawyers, caseworkers and other consumer advocates are the eyes and ears on the ground who will know first, and know intimately, what kind of difference these payments, adjustments and programs are making," Smith said. "That’s why we’ve created this dedicated tool -– to see what they’re seeing."
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