Wednesday, September 14, 2011

Finally - Major Changes in the Mortgage Industry

Major regulatory changes are shaking up the how servicers deal with delinquent homeowners.

The number one complaint the Center hears from struggling homeowners is how difficult it is to work with their bank or servicer.  Common complaints include getting lost in overly-complicated voice-mail systems, being routed from one department to another, never being able to speak with the same agent or representative twice, and constantly being told conflicting information when speaking with different agents.  However... a major change is on the horizon that should put an end to all this confusion:

The Making Home Affordable (MHA) program has updated their servicer guidance to require a “Single Point of Contact for Borrower Assistance”. In essence, the new guidance requires servicers to provide a single relationship manager to each struggling homeowner that is applying for help through the Making Home Affordable program or any other foreclosure-prevention option.  This includes HAMP, HAFA, UP and any in-house modification MHA servicers may provide.

The relationship manager will be responsible for communicating with the borrower, tracking their documents, responding to inquiries and coordinating the communication with any other bank/servicer employees. Homeowners should receive notice about being assigned to a contact as well as a toll-free number to use and information about the preferred method by which they should send documents to the servicer. The guidelines state that the relationship manager must be a full-time employee of the servicer, not a sub-contractor, who should be fully trained on the MHA program and the other in-house loss mitigation options available to clients.  Even if the client is not eligible for any loss mitigation options, and the loan is foreclosed, the relationship manager must still be available to the homeowner to answer questions about the status of the foreclosure.

It remains to be seen how well the servicers do implementing these changes, but this is good news for struggling homeowners AND their housing counselors.

Are you, or someone you know struggling with mortgage payments?  FREE, non-biased housing counselors are available to help!  Don't delay, visit to learn more about ways to avoid foreclosure in Minnesota.

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