California Reinvestment Coalition

CRC Releases its 9th Survey of Housing Counselors on Foreclosure Prevention

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CRC’s latest housing counselor survey made a big splash as it raised concerns that banks are violating the National Mortgage Settlement (NMS) and the landmark Homeowner Bill of Rights. Senator Barbara Boxer responded by asking Attorney General Holder, HUD Secretary Donovan, and NMS Monitor Joe Smith to investigate. Joe Smith, the national monitor of the NMS stated that the findings were consistent with what he has heard from groups around the country.

CRC released its 9th survey of housing counselors on foreclosure prevention efforts in early April. 84 nonprofit housing counselors and legal service lawyers were asked if large banks were following key provisions of the landmark National Mortgage Settlement (NMS) and Homeowner Bill of Rights (HBOR). The survey also asked if borrowers of color, Limited English Proficient borrowers, widows and similar borrowers, and disabled borrowers had equal access to foreclosure prevention relief, like loan modifications, and servicing reforms.

Unfortunately, counselors report poor bank practices that suggest potential violations of NMS and HBOR, after both of those measures took effect.

Specifically, counselors noted problems with:
     1. Single Points of Contact (SPOC) who were not available and qualified to help borrowers navigate the complex loan mod process;
     2. Dual track, with banks moving through the foreclosure process after a borrower had submitted a complete loan modification application;
     3. Required timelines for responding to borrowers, which are rarely honored;
     4. Banks continuing to lose documents and improperly deny loan modifications to borrowers who appear to qualify for help; and
     5. Borrowers of color, Limited English Proficient homeowners, widows, and disabled borrowers facing additional challenges to being able to stay in their homes.

The survey release received a lot of attention, including:

Senator Barbara Boxer responded by asking Attorney General Holder, HUD Secretary Donovan, and NMS Monitor Joe Smith to investigate.Click to read press release .

The Los Angeles Times ran a good article, with NMS Monitor Joe Smith acknowledging that he is hearing similar complaints from the survey in his discussions around the country. Click here to read more .

Univision spoke with CRC Board member Daniel Rodriguez of ELACC about challenges facing Spanish-speaking families trying to avoid foreclosure.
Click here to listen .

National Public Radio spoke with Kevin and CRC member Cheyenne Martinez Boyette of MEDA about the survey. Click here to listen.

CRC is using the survey findings in advocacy with policymakers, regulators, and financial institutions. The survey has been cited in a few advocacy arenas, including in proxy statements in support of CRC ally sponsored shareholder resolutions calling on Wells Fargo and Bank of America, urging those institutions to conduct independent fair lending audits of their mortgage servicing business.

For a copy of the survey, click here: Chasm Between Words and Deeds IX .