Survey: Counselors Report Dual-Tracking Problems Still Persist

Survey: Counselors Report Dual-Tracking Problems Still Persist

04/08/2013 BY: ESTHER CHO

Banks are falling short of requirements to provide mortgage protections to homeowners through the national mortgage settlement and the California Homeowner Bill of Rights (HBOR), according to a California Reinvestment Coalition survey of housing counselors in the state.

Dual-tracking, which is when a lender continues foreclosure proceedings against a homeowner who is also pursuing a loan modification, was reported by more than half of the counselors surveyed even though the practice is prohibited.

The California Homeowner Bill of Rights banned the practice in the state on January 1, 2013.

Nationwide, a dual-tracking restriction was placed on five servicers—Bank of America, Citibank, JPMorgan Chase, Wells Fargo, and Ally— part of the national mortgage settlement. The servicing guidelines for the national settlement took effect October 1, 2012.

According to the survey, over 60 percent of the counselors reported that Bank of America, Citibank, JPMorgan Chase, and Wells Fargo still dual track “sometimes,” “often,” or “always.”

Counselors in the survey also reported single points of contacts (SPOC) were not accessible, consistent, and knowledgeable. Through the HBOR, homeowners in the state are guaranteed a SPOC from their servicer.

However, over 70 percent of responding counselors found banks provided SPOCs that were “never,” “rarely,” or only “sometimes,” accessible, consistent or knowledgeable.

Over 60 percent of counselors in the survey also held the view that the five large servicers denied loan modifications to seemingly qualified homeowners either “sometimes,” “often,” or “always.” In addition, more than 60 percent of counselors said the five largest servicers “rarely” or “never” made loan modification decisions within 30 days of receiving a completed loan modification application.

The survey was conducted in February and March 2013 and included responses from 84 counselors and lawyers who represent hundreds of thousands of homeowners.

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