Mortgage Servicers’ “Customer Disservice” is Intentional

Following is an excerpt from my most recent letter to my state attorney general’s staff. Ever since I filed a complaint related to the way my mortgage servicer strung me along after I requested my mortgage loan be reviewed for modification, personnel from the Office of the President of Wells Fargo have been telling tall tales about all the reasons it was my fault the review took seven months.

The more these people from the president’s office say about their internal systems, the more confused I become about whether there is even meant to be any sort of rational system. It’s not as if this is rocket science. Handling large numbers of documents in an efficient and effective way isn’t fun work, but it is very ordinary work for large corporations like Wells Fargo, which probably employs at least a few people specifically trained and tasked to create, implement and monitor such systems. And it’s not as if mortgage modification was an entirely new concept. As long as there have been loans, there have been circumstances causing some borrowers to need to modify terms.

By the time I first requested a mortgage modification, the company was well into HAMP. So if there was intended to be a system for efficiently processing loan modification requests, I would have expected it to be up and running by then.

I have come to believe the disjointed, highly unprofessional brand of feigned incompetence that Wells Fargo and the other large loan servicers seem to have in common IS the system. I believe the banks fully intend to string people along, to play on their hopes and fears, to wring every last dime out of the borrowers and the investors and then foreclose. That explains very neatly why homeowners seem to have the same types of experiences with all the big servicers – the stories of “lost” documents, phone queue mazes, endless trial mods, two-track systems with foreclosure winning out over promised modifications are too much the same to be mere coincidence.

Why else would it be so difficult even to figure out what paperwork the servicer/investor requires, in what format and submitted when? That’s just a simple checklist that should be part of each loan servicer’s website, updated as needed using information directly from servicers, investors and anyone else overseeing the various programs. If your loan is owned by investor A and serviced by bank E, here are the documents you need to submit, here is the timeline your review will follow, here are the standards that must be met and here’s an actual human being you can call if you have any questions. Not. Rocket. Science.

Yet, WFHM can’t even get straight how often it requires borrowers to update income documentation to keep their loan mod reviews moving forward. From April 2010 to January 2011, I got 11 different answers to that seemingly simple question. (See Lie #14.) Were all 11 of those people just coincidentally incompetent? No. They were doing what their superiors, what Wells Fargo executives, told them to do.

Intentional “incompetence” explains why WFHM’s customer-service queue representatives are forbidden to either transfer a borrowers’ call to anyone else in the organization or to provide the borrower with any direct contact information for the people who are reviewing their loans. They can only log your question or request to be contacted into the electronic notes system, where it might be seen the next time someone refers to the notes and you might get contacted by someone who can and/or will answer your question. Or not. That kind of inefficiency in a mom-and-pop operation might just be believable. But for a multi-billion-dollar global corporation to operate that way in this age of information and technology absolutely is not believable, unless the inefficiency is built into the system intentionally.

Inefficiency and obfuscation by design explains why written communication from Wells Fargo has no signature or even a printed name of someone the customer can contact for further information. And why letters from WFHM generally provide no return address that is connected with a real human being and only a generic customer-service queue phone number.

None of this represents standard business practice as I was taught and practiced in several industries – publishing, insurance, finance, higher education. This is the new brand of “customer disservice” that seems to be endemic to big corporations.

None of this is an accident. Masses of fraudulent foreclosure paperwork manufactured by robo-signers isn’t a “technicality” or a “clerical error.” The banks weren’t “overwhelmed” by an unexpected number of homeowners seeking mortgage help. They knew exactly how many sub-prime mortgages they had on their books and they knew exactly how many borrowers whose loans they services were either slow- or late-pay customers. That’s just P.R. hacks trying to spin these systems banks implemented to intentionally derail HAMP and other programs that, at least on the surface, appeared to be aimed at helping average people adversely affected by the economic crisis those very same banks caused.

It’s the same insidious spin tactic that sticks the label “deadbeat” on people who jump through hoops for months to qualify for and then meet all the terms of trial modifications and then expect the permanent modifications they earned. The bank shills also chide those people who go to court to demand the banks abide by foreclosure laws and prove they have legal right to foreclose for just “trying to get a free house.”

Update 3/2012: HUD IG Report Released With Settlement Details Servicer Abuse Directed From the Top
Like I said. The BS the banks are putting borrowers through is an intentional, institutional strategy put in place by the top executives. Not just “paperwork errors” and “mistakes by low-level employees.”

Dear Hypocrites: Your Constituents Would Like Transparency & Accountability From You!

Congress has a guilty conscience!
We screwed the American people
and we don’t want them to know
so we can keep on doing it

House Republicans concerned about consumer bureau’s role in foreclosure issues

Dear Messrs. Bachus, Issa, Garrett, McHenry, Neugebauer and Ms. Capito:

If there is anyone left in the United States who still believes that our “elected” officials serve at the pleasure of and for the benefit of the people, your recent letter to Treasury Secretary Timothy Geithner sure bursts that bubble.

In that letter you’re all whingeing about the possibility that the Consumer Financial Protection Bureau, the new agency charged with protecting the rights of average American consumers, may have provided useful and meaningful assistance to the state attorneys general in their investigation of the big banks’ potentially fraudulent handling of foreclosures and mortgage modifications.

Said investigation was launched by the AGs, who had been fielding complaints from many hundreds of their state residents about banks lying to homeowners seeking mortgage modification, falsifying documents to push through foreclosures and just generally doing whatever they could to steal people’s homes.

These same people who are losing their homes in record numbers, who are given the run-around by their mortgage servicers, who are being promised assistance by a government program that was seemingly designed not to provide the help it promised, ARE YOUR CONSTITUENTS. They are the good people who do the living and working and praying and voting right there in your states and districts.

So, when the attorneys general, those folks elected to be the chief law enforcement officials in their states, seek assistance from a federal agency charged with protecting the legal rights of consumers all over the United States, that seems like a logical match. The state consumer rights advocates work with the federal consumer rights advocates to make the world better for YOUR CONSTITUENTS.

What I don’t understand is why would you the elected officials who represent both the states and this nation, not provide full-throated support for the efforts of both the AGs and the CFPB to ensure the American people (YOUR CONSTITUENTS) are not hung out to dry by these big banks?

All this letter does, besides making you look like petty little tattle-tales, is show once and for all that you and the party you represent don’t care one little bit about YOUR CONSTITUENTS. Those good people in your states and districts had better just wise up and realize that the folks they send to Congress to advocate for them generally could not care less what the big banks are doing to them, whether they have houses to live in or jobs to earn from or medical insurance to aid them when they’re sick.

If any one of you was truly “concerned that transparency and accountability be given the highest priority throughout the government,” you would welcome any chance to prove wrong those of YOUR CONSTITUENTS who have come to believe that you are bought and paid for by those same big corporations that are playing fast and loose with the laws seemingly in order to foreclose, foreclose, foreclose.

This bizarre attempt to discredit Elizabeth Warren, who is so obviously incredibly motivated and qualified to advocate for the rights of consumers, makes it crystal clear that you’re all running scared.

Is it that you’re all so very afraid the AGs and the CFPB will uncover all the insidious little ways Congress and the Administration have enabled these big companies to completely screw over the average American? That somebody will notice that even in light of outright mortgage and foreclosure fraud (can you say robo-signers?!), none of the officials running the big mortgage servicing companies has gone to jail? That you have all sold your souls to the banks and financial institutions to finance your election campaigns?

I just have to say I think you’re living in a fantasy land. I’m pretty sure all the nasty Warren-bashing (yes, Mr. McHenry, I’m looking at you), along with that parliamentary stunt when the Senate  pretended to be in session over the Memorial Day weekend, has made it pretty clear that the Republican Party does not consider the rights of consumers to be of any importance. Even though we’re YOUR CONSTITUENTS.

Even as you tout the virtues of transparency and accountability, you all seem to fear them mightily. I get why the banks want their misdeeds against consumers kept secret. But when elected officials collude with these companies and work against the public interest, something is seriously wrong.

You might just as well put up a big, flashing billboard that says “Congress has a guilty conscience! We screwed the American people and we don’t want them to know so we can keep on doing it!”


Here’s how much each of the signators has been paid by
companies/industries involved in the financial crisis:
Spencer Bachus – $1, 072, 823 (Commercial Banks)
Darrell Issa – $159,360 (Real Estate)
Shelley Moore Capito$439,624 (Real Estate)
Scott Garrett – $481,867 (Securities & Investment)
Patrick McHenry – $269,316 (Real Estate)
Randy Neugebauer – $455,531 (Real Estate)

The Bank Lobby v. Elizabeth Warren
On May 13 the House Financial Services Committee passed three bills designed to weaken the CFPB, which goes live on July 21. The three chief sponsors of the CFPB bills—Duffy, Bachus and Shelley Moore Capito—received a total of $1.4 million from the finance, real estate and insurance sector during the 2010 election. Now they’re returning the favor.

Administration, Treasury “Punish” Banks

3 big banks lose mortgage modification incentives

I have to say, when I read this headline this morning my first thought was “what incentives?” It has not been my experience that any of the big mortgage loan servicers appear to feel motivated in the least to grant modifications.

If they did, HAMP would be helping the 4-5 million people as it was purportedly designed to do instead of having completed only 700,000 permanent modifications to people who mostly had to fight and claw for more than a year for assistance.

“The Obama administration has punished three of the nation’s largest banks, judging them unworthy of receiving financial incentives through its signature foreclosure relief program until they improve their practices.”

Okay, so let me be sure I understand this:

In order to provide  incentive for several of the largest mortgage loan servicers to grant more mortgage loan modifications under the Home Affordable Modification Program, the Obama administration is “punishing” Wells Fargo, B of A and Chase by taking away the already meager financial rewards the program offers these banks.

If you needed any more proof that your government never meant for HAMP to do a darn thing to help homeowners, there it is.

Here we have a voluntary program administered by two institutions that own or guarantee a majority of the mortgages in the U.S and implemented by the very same banks whose greed  created the housing crisis. The program consists of a bunch of guidelines the banks routinely completely ignore. There is no independent oversight, no objective appeals process and no transparency.

The only “incentive” for banks to do anything other than just keep their foreclosure factories pumping out fake paperwork and throwing “deadbeats” out of their homes are so-called rewards of $1,000 for each loan that they permanently modify and another $1,000 if that modification is successful over time.

Who is not surprised that companies that measure their profits in the billions of dollars have absolutely no interest in these financial “incentives.” Wells Fargo alone reported first-quarter 2011 profits of $3.8 billion. And that 48-percent annual increase didn’t come from $1,000 HAMP modifications.

The banks have behaved so badly when it comes to modifications, they have told so many lies and played so many ridiculous “delay and deny” games with so many people, and all Treasury and the administration can come up with is this completely pointless slap on the wrist?

It seems to me what they’re really doing is giving these banks an easy out, as if they needed more reasons not to help homeowners. I think this quote from a consumer advocacy lawyer is spot on:

Alys Cohen, a staff attorney with the National Consumer Law Center, said the actions were “too little too late.”

“It is not even clear that the incentives payments are something that these banks want enough to change their behavior,” she said. “It certainly hasn’t caused the servicers to comply with the rules to begin with.”

AZ Homeowners’ Assistance Program on Track to Fail

Seems the Arizona Housing Department’s hardest-hit-fund program still isn’t doing much to help homeowners fend off foreclosure.

Through the first quarter of 2011, a period when Arizona ranked second in the nation for the number of foreclosures, only 10 homeowners received assistance under the Save Our Home AZ program.

The program is supposed to be the Arizona Department of Housing’s method to distribute its $125 million federal allocation from the Hardest Hit Fund aimed at helping homeowners in the 10 states hardest hit by foreclosures.

The stated intention is to” provide assistance of up to $50,000 to qualified homeowners to create an affordable and sustainable mortgage payment through a permanent principal reduction modification.” The program is supposed to be helping 4,000 homeowners.

So, how’s it doing so far? How many of the 4,000 have gotten assistance? Just the 10. One, zero. Ten. Yes, since the program’s inception in September 2010, only 10 homeowners have been helped.

Only one of those successful transactions has been a principal reduction, which economists, consumer advocates and some financial industry executives say will be necessary to end the foreclosure free-fall and stabilize the housing market. (Principal reduction might even end up part of a settlement being negotiated between the big five U.S. mortgage loan servicers and a coalition of state attorneys general.)

In addition to the glaring limitations of the program, which I wrote about back in December 2010, it seems the program only works if banks opt in. The money is there, but banks have to agree to participate. So far, in Arizona, it seems only Bank of America has done so. My servicer, Wells Fargo, apparently opted out.

If Arizona really works hard, maybe Save Our Home AZ can be even more dismal a failure than the federal HAMP loan modification program.

Update 9/12/2011:
As of the end of June 2011, nine months after its inception, Save Our Home Arizona has only helped 78 Arizonans avoid foreclosure. Only three of those transactions were principal reductions.

At this rate, it will take 38.5 years for the program to meet its stated goal of helping 4,000 homeowners avoid foreclosure in this state that is one of the worst victims of the mortgage meltdown. Absurd!

Update 3/2012: As further proof this program is pie in the sky, as of Feb. 24 only a total of 16 modifications have been granted. In a year and a half. In a state consistently ranked in the top three hardest hit by foreclosures. Absurd.

Update 4/2012: Looks like Arizona isn’t the only state doing a dismal job disbursing the “Hardest Hit Fund” dollars to homeowners. A total of 3% of the fund has helped people save their homes from the banksters’ foreclosure feeding frenzy. Another farce, brought to you by your government.
Treasury Faulted in Effort to Relieve Homeowners