It was one of the biggest frustrations of the mortgage crisis: Borrowers would call their banks hoping to work out a way to save their homes, only to be shuffled between voice mailboxes and forced to repeat their stories again and again.
So the attorneys general and federal agencies working on the national mortgage settlement mandated a “single point of contact” system, giving homeowners a go-to person so they could quickly get in touch with someone who was familiar with their situation.
But advocates say that although the banks have responded with improvements, it hasn’t always worked out in practice.
Foreclosure defense attorneys and homeowner advocates across the state have told the Observer that homeowners have found full voice mailboxes, gone weeks without a response and been assigned to a revolving door of contacts.
The frustration is also reflected at the national level: Settlement monitor Joseph Smith’s latest report shows more than 3,000 complaints nationwide have involved customer service issues, about half of the total complaints he has received. The figures do not give a breakdown by bank.
“I’ve had clients report having seven to 10 different people on their file,” said Jason McGrath, a Charlotte-based foreclosure defense attorney with McGrath & Spielberger PLLC.
An Asheville man told the Observer his contact switched four times in a three-month period after the settlement went into effect. Ed Dockery moved into his Asheville home in 2004 and refinanced with Countrywide Financial Corp. in 2007. Bank of America acquired Countrywide a year later. Dockery fell behind on his mortgage payments in 2009 when a medical problem hurt the family’s finances, and he started trying to work with the bank on a modification.
Letters sent from Bank of America show that after the mortgage settlement went into effect in March, Dockery’s single point of contact began rapidly changing. One lasted just a week, he said.
Dockery’s wife, April, said that because of all the changes, they received the same loan modification packet seven times in two weeks. And she said they never got a clear answer from the bank on what they should do to finish their modification.
Bank of America said it reassigned contacts for some homeowners in the early days of the settlement as it finalized its system.
Dave Steckel, a senior vice president in Bank of America’s division that services troubled loans, said he believes problems with the single point of contact system – such as having trouble getting through to the contact – are unusual. He said the bank has guidelines for how quickly each customer should get a response and internal reporting to make sure they’re followed.
“As in any business, when you manage 5,000 people, you’re not going to be flawless,” he said. “We have the systems in place to manage our missteps.”
At Bank of America, each contact is responsible for at least 70 to 75 mortgages, and sometimes more than 100. Asked whether that number is appropriate, North Carolina Attorney General Roy Cooper and settlement monitor Smith said they didn’t know. Bank of America says it believes its mortgage-servicing staffing is adequate and is at a much higher level than it was several years ago.
Even with the settlement in effect, Bank of America in the fourth quarter cut 3,000 full-time employees and 6,000 contractors in its unit that deals with troubled mortgages.
Though the number of employees in the division has decreased recently, Steckel said it has only drawn down proportionally with the number of delinquent loans so contact-to-customer ratios are maintained.
Randy Bockenstedt, senior vice president in customer contact and collections at Wells Fargo Home Mortgage, said Wells doesn’t claim to be perfect and that the bank does hear complaints on the contact system. But he said it has received many fewer complaints about communication after the single point of contact system was put in place.
Smith, the settlement monitor, said his office plans to look at caseloads for workers who deal with troubled borrowers. In the late spring, the monitor’s first formal report to the court will evaluate the banks’ performance on all of the servicing standards, including the single point of contact system.
After that, he has the ability to impose new yardsticks to determine whether banks’ staffing levels are adequate.