Did AG Settlement Help Homeowners? Not So Much.

One year after the attorneys general of 49 states negotiated what became known as the “National Mortgage Settlement,” are loan servicer banks more responsive to homeowners seeking to have their mortgage loans re-structured?

The settlement included a number of servicing standards that should have been very helpful to homeowners seeking loan modifications to avoid losing their homes to foreclosure. Among those was a requirement that loan mod applications be reviewed in 30 days, a specific mandate that borrowers be assigned a single knowledgeable contact person to work with them through the review process and provisions that limit the process known as “dual-tracking” whereby banks race to complete foreclosures whilst dragging out loan mod reviews.

Here’s what the settlement promised, according to the official website.

“The banks have agreed to major reforms in how they service mortgage loans. These new servicing standards require lenders and servicers to adhere to a long list of rights for those facing foreclosure.  For example, borrowers will have the right to see all of their loan documents to make sure any potential foreclosure is legal; they will be given every opportunity to first modify their loan before facing foreclosure; lenders and servicers will be required to have an appropriate number of well-trained staff members to promptly respond to the needs of distressed borrowers; and finally, borrowers will have the right to deal with a reliable, single point of contact so they have access to a person from whom to obtain information throughout the process.  This is very important because, throughout the foreclosure crisis, borrowers have lodged widespread complaints about their frustrations in trying to work with their lenders.” (FAQ)

So, have the banks complied? Judging from the comments on this blog, the answer is a resounding “NO!”

Despite including a “very robust enforcement mechanism,” the settlement doesn’t seem to have significantly changed the way the big banks are working with homeowners. People seeking loan mods are still being strung along for months or years sending paperwork over and over or stuck in bogus trial modification plans that trash their credit while the money disappears. The whole “single point of contact” thing doesn’t seem to be working too well, either.

Oh, and then there are the states that stuffed their settlement $$ into the general fund so homeowners got absolutely nothing after losing their homes to lies and fraud. (Yes, the AGs were complicit in that, at least in my state.)

So, if you’re one of the millions of Americans who lost your home to a questionable foreclosure over the past few years, you might want to send your state’s attorney general a big thank-you for all his or her help in bringing to justice the perpetrators and preventing the same nonsense from going on and on.

Send me a copy of your letter and I’ll post it on the blog for our fellow foreclosed homeowners to see.

Update 4/12/13: Banks Continue to Violate Nationwide Servicer Settlement
Update 6/11/13: Well, at least Florida AG Pam Bondi has noticed: Bondi gives Wells Fargo a Wednesday deadline to respond to settlement concerns

7 thoughts on “Did AG Settlement Help Homeowners? Not So Much.

  1. I just found your blog. I have been approved by the State of Arizona for the ‘Save Our Home Arizona’ program, or what is also called ‘Hardest Hit Fund.’ I was referred to a loan servicer, Old Pueblo Community Services, after I received the approval letter. They were great, responded right away and helped me to get started. Now I am stuck! I am a current Wells Fargo customer but they won’t help me. I have been calling the number I was given by Old Pueblo for Wells Fargo (855.248.8616), which sends the caller to a message that states the call will be returned in one business day. I have called for a week now, every day, no return call. Yesterday (2/20/13), I had a conversation with the corporate office, no wait, three different conversations, in which I was basically steered into a loan modification program that simply would reduce my interest rate, but would not make use of the funds available to reduce my mortgage. After two hours of this, I finally said “no.” No one would give me any further contacts or ideas as to how to use these funds. I called again, finally spoke with a rep who said the best bet is to contact the local Wells Fargo Home Mortgage Department on N. Oracle here in Tucson. I was given a phone number, called, a recorded message, no return call. This AM, I called a local Wells Fargo office and asked for a main number for this branch, called that number, again a recorded message. Interesting. After reading this blog, I am definitely getting the sense that Wells Fargo DOES not want to work with these programs or use these funds. Now what? Any ideas or help would be most appreciated.
    Rebecca Smith

  2. Hi Rebecca,
    Congrats on making it through the nonsense to get approved to get Hardest Hit Fund assistance. What type of assistance were you approved for? I believe the choices are principal reduction, second mortgage, unemployment assistance and principal reduction.
    I see that Old Pueblo Community Services is a HUD certified housing counselor. Did they help you fill out the forms you needed to submit to Wells Fargo and send them? How long ago did you send the forms? Under the rules set by the recent National Mortgage Settlement, Wells Fargo should review your paperwork and assign you a single contact person – they call them “home preservation specialists.” In theory that person should guide you through whatever process the bank has for whichever type of assistance you’re seeking.
    I don’t think local bank branches have anything to do with any review processes, so I wouldn’t waste my time there. If you have submitted loan mod or short sale paperwork to Wells Fargo and haven’t gotten a response, try escalating the review to the Wells Fargo Home Mortgage Office of Executive Complaints. The most recent # I have is (800) 853-8516. If you call there, they can usually point you in the direction of the person who has been assigned your loan review.
    Mind you, the bank will still give you the run-around over and over and over. And no, Wells Fargo has no intention of actually granting you assistance of any kind. You’ll have to fight tooth and nail, perhaps for years, to get anything.
    Sadly, I think the whole Save Our Home AZ program is part of the same farce.
    I wish you the very best of luck. Feel free to keep me and other blog readers updated on your progress.

  3. I started dealing with my lender Taylor Bean and Whiitikar 2009 when the markets crashed and our business sunk rapidly . We worked on modifications back and fourth sending paper work back and fourth up to May 21st 2011 When I filed bankruptcy putting my home in bankruptcy stay. Mean while Taylor ,Bean,and Whitikar crashed in 2010 as one of the largest banking frauds
    in history.A servicing company named Round Point Mortgage took over the servicing and demanded of payments which we where promised a modification and they where lies and unjust in helping us with our needs . they said we did not qualify after stringing us on for a year ! Bankruptcy helped and we have not lifted stay as yet . But a threatening letter was just recieved by RCO law firm on a pre – warning of foreclosure . I will wait for bankruptcy court to be lift my stay before I speak with any one . They sold my home more then once in Miers in 2009 and 2010. They don’t deserve my home beacuse they are corrupt and unfair!

    Thank you Felicia Botonis

  4. Wow! Just found this website out of desperation! We have been going through a “loan modification” for over a year now. We even went so far as to contact our state senator (Harry Reid) who has a point of contact for all those experiencing the run around from mortgage companies. We have the worst, Wells Fargo. We have filled out papers countless times, actually got a loan modification (which wasn’t helpful as then we were paying DOUBLE our regular mortgage payment)! Just as your blog site states, when Reid’s office contacted Wells Fargo, Wells Fargo stated that they had done everything possible for us and that we were in the wrong! My husband had lost his job and it was difficult for us to make our monthly payment. We contacted WF right away, and thus began the “single point of contact” with a mortgage preservation specialist. This person NEVER returned our calls and everytime we called we would get the voicemail stating that we would be called in 24 hours. Strung along for months, WF would not accept any type of payment because we were in the “loan modification process”. 7 months later (after Reid’s office contacted WF), we were given the loan modification (which was actually paying the attorney’s fee of $2000 because we had gone into foreclosure) and then setting up automatic DOUBLE payments for the next six months. Our loan preservationist “single point of contact” changed TWICE since the beginning of all this, told me to call after the six months to set up another round of automatic payments. I did. He never responded. I tried calling WF to set up payments and my call was constantly rerouted to Trevon Shubert our then single point of contact’s voicemail (“Your call will be returned in 48 hours”) never was. A month goes by. I called, pressed “0” to speak with the next available Loan Servicer. Yea! Spoke with a real person who told me she would gladly set up two automatic payments which were only the original loan payment instead of the double payments. “Really?” I said. “Yes” she said. I set up two automatic payments. A month later when I called to set up the rest of the payments to finally finish this horror story off, the “next available loan servicer” (because I could never reach Trevon Shubert who never returned my calls), told me my loan had breached the loan modification because I did not make the double payment as was promised and he could not accept any payments and that I had to contact my loan servicer! Bunch of crap!!!!! Now four months later we are again in foreclosure, WF would NOT accept our payments because we were AGAIN being reviewed for a loan modification (filling out the SAME paperwork), and just received word that we make too much money to qualify for a loan modification (I am a Nevada teacher the lowest paid in the nation and my husband is a food servicer), now owe WF 7 months worth of payments $2000 to law firm who is in charge of foreclosure, back at square one that began a year ago!!!!! We have been in this house for 17 years!!!!!!! Going to give up and walk away. Sick of this. No help. And to rub salt on wound? We just received a letter from WF to contact them for financial assistance if we want to remain in our home!

  5. Hi A, So sorry that you’re going through Wells Fargo’s BS machine. While your loan mod experience sounds a lot like all the rest of us – sending paperwork over and over, not getting phone calls returned, etc. – the way your loan was restructured sounds quite unusual. Double payments? That’s generally not how a trial modification works. I’m also unclear whether the $2,000 went to an attorney representing you or whether you somehow got conned into paying the bank’s legal fees. Maybe Nevada’s laws are very different from those I’m familiar with, but it sounds fishy to me. I’d contact the Nevada attorney general’s office and maybe post a summary of your situation at loansafe.org to see if you can get any useful advice. Oh, and a nice thank-you note to Harry Reid for taking the side of the banks against the people of his state. I’m simply amazed how many of our “public” servants have completely sold their souls to the banksters and corporate money machines. Good luck to you!

  6. AKirch,I feel your pain!I live in CT,laid off in 08 and worked 13 of 50 months!Went through foreclosure and modification process,I even paid my unemployment forbearance payments on time!Three separate times!I worked overtime on the 50th month and hemp said I make too much money for a modification!!After the crooks at chase banks lawyers and the court sent me a sell date on my home I filed for bankruptcy.Not only do the wall street pieces of shit want to help us,but neither does the bought and paid for crooked pile of shit U.S.government!Not only did they both create this deep depression,the U.S.gov.is such a bought and paid for pile of shit they loaned the wall st. pieces of shit almost 800 billion dollars with absolutely no strings attached!So instead of loaning money to main street to help the economy,they invested in paper and are now 30% bigger than too big to fail!And what did the wall street pieces of shit sacrifice during all this?They send even more money down to that shit hole of a whore house,Washington,D.C.Good luck and get a good bankruptcy lawyer!

    • Sorry you had to go through this nonsense, Dersta. And glad you’re venting your anger at the banks and the government who put millions of honest, hardworking people against the wall for no reason other than plain old GREED. What they did is unforgivable. And it makes me mad, too, for myself and for every other person who was strung along, lied to and then kicked to the curb by the big fraud-factory banks.
      Best of luck as you negotiate your bankruptcy and continue to fight against foreclosure.

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