For those facing foreclosure, problems persist in dealing with servicers. A recent National Consumer Law Center survey of consumer advocates and housing counselors about their experiences with the mortgage servicing industry revealed ongoing problems. These problems have been present since the financial crisis began in 2008 and unfortunately continue on today.
Successors in interest (heirs, widows, and orphans) often have trouble getting even basic information about the loan as the lender does not view them as valid parties of interest. There are unnecessary hurdles in place that prevent these cases from reaching simple resolutions that would allow the successor to resume payments, keep the home, and ensure that the loan remains performing. Resolving this problem is a win-win situation for the lender and successor, and it can be accomplished with basic changes to the system and more education to all stakeholders about current regulations and requirements.
Repeated requests from servicers for documents from the homeowner is another consistent complaint. It can be an endless cycle for the homeowner and can prevent resolutions for homeowners with the capacity to pay. The definition of a “complete package” can vary depending on a borrower’s financial circumstances, and it can be difficult to get a clear answer from a servicer about which documents are needed. Servicers often ask for documents in a piecemeal fashion, or ask for the same document repeatedly with no explanation as to why.
Mortgage foreclosure suffers from issue fatigue, but it’s important that we continue to work on this problem in an effort to stabilize families and communities. A homeowner dealing with foreclosure should seek help from an experienced advocate (housing counselor or lawyer) to assist in navigating what still proves to be a complicated process.
Rachel Gallegos
Lead Consumer Advocate, Steve Harvey Law