(HuffingtonPost by Shaun Donovan) -- A recent article by the Huffington Post's Peter S. Goodman showed how one homeowner from the Bronx has continued to struggle to save her home because of the outrageous treatment she's received at the hands of the bank that services her loan. Reporting with painstaking detail the obstacles Bank of America has thrown up as Katie Diaz spent months trying to secure a mortgage modification that lowered her monthly costs, Goodman's piece highlights the reality too many homeowners have faced during this crisis -- the dropped calls, lost paperwork and poor customer service that leaves them frustrated, confused and unsure whether they will be able to save their home.
Unfortunately, the author assigned much of the blame for these failures not to Bank of America, Ms. Diaz's servicer -- but rather to the $25 billion mortgage servicing settlement that Bank of America and four other servicers agreed to this spring. The largest mortgage relief effort in history, the settlement provides $17 billion in consumer relief and billions more to states that can be used for proven anti-foreclosure efforts like housing counseling. It also creates tough new customer service standards that require servicers to put an end to the kind of behavior faced by Ms. Diaz.
However, from Goodman's piece, the reader is left to believe that the settlement has failed before it has even fully taken effect.
Not only does the piece fail to cite any of the homeowners who have already received significant relief through the settlement, it isn't until the fourteenth paragraph that the article even mentions that the new servicing standards designed to protect Ms. Diaz and others from the abuses documented in the article won't be fully implemented until early-October -- when the settlement requires the banks to fully comply with more than 300 specific servicing standards.
The story also fails to include several key facts about the settlement that will help homeowners like Ms. Diaz going forward:
First, the article makes no mention that the new standards will require servicers to send a representative to foreclosure proceedings with "appropriate access to information from Servicer's books and records necessary to perform their duties," and to further "ensure that foreclosure and bankruptcy counsel and foreclosure trustees have an appropriate Servicer contact to assist in legal proceedings and to facilitate loss mitigation questions on behalf of the borrower." Where Ms. Diaz and her housing counselor were stuck working with a bank representative who clearly was unfamiliar with her case, its status or history, under the settlement, after October 5th, servicers will have an obligation to make sure that this practice is ended once and for all.
Second, the article fails to note that the settlement forces servicers to provide a single point-of-contact for homeowners like Ms. Diaz and their representatives so they can speak with someone at the bank who will not only have knowledge of their account, loan status and requests but also make sure a homeowner receives all the information they need to make an informed decision about their modification options. Specifically, the settlement states that the "Servicer shall establish an easily accessible and reliable single point of contact for each potentially-[modification] eligible first lien mortgage borrower so that the borrower has access to an employee of Servicer to obtain information throughout the loss mitigation, loan modification, foreclosure processes." Just last month, all five servicers in the settlement reported to the independent monitor that they have implemented this important standard for their operations going forward.
