Tales from the Trenches

In a report by NPR today we see part of the problem. The scale and the complexity of the number of homes going into foreclosure is overwhelming. Without the help we offer, there might be no chance.

First of all the sheer scale of the challenge.

Tiffany Palmer, who works on the call center floor, says more and more homeowners are in trouble because they’ve had their hours cut at work or because a spouse has lost a job. With the recession, there are now a lot more middle-class people with decent credit who can’t pay their mortgages. Nationally, one-third of the people who are falling behind on their mortgages are in traditional “prime” fixed-rate mortgages.

Bank of America has 8,000 people working on the problem and gets about 2 million calls a month. BUT the process is still opaque and will only work if the applicant has a lot of help.

Economists, including Federal Reserve Chairman Ben Bernanke, have repeatedly said that preventing foreclosures is good for the housing market and the whole economy. But, in many cases, loan modifications aren’t going through.

The U.S. Treasury Department has started issuing banks foreclosure report cards. The last one found that under the president’s plan, Bank of America had modified only 4 percent of loans that were more than 60 days delinquent. The bank says it has doubled that number in just the past month. The next report card is due Wednesday.

The last report card found that JPMorgan Chase extended loan-modification offers on 20 percent of its delinquent loans. CitiMortgage was at 15 percent and Wells Fargo had modified only 6 percent.

Janine Emlinger, a 48-year-old homeowner in Curtis, Ohio, says she’s been trying for a year to get a loan modification, but Bank of America keeps losing her documents. So she keeps falling further behind on her payments.

Our work may be just beginning.