On December 16, 2009 Chase quietly issued a press release. In it the company announced that it was going to open an additional 24 Home Ownership Centers by the end of April of 2010. Chase already has 27 of these centers.
The purpose of these centers is to provide in-person help to people with home loans through Chase who are struggling to make their payments. People facing foreclosure or who fear they will soon face foreclosure can go to the center closest to where they live and meet with a representative from Chase.
At these meetings the representatives from Chase review each individual case and compile the information the company needs to determine if a loan modification can be done. If the loan can be modified, the monthly payment is reduced to a level the person can afford to make.
The original 27 Home Ownership Centers were opened in the first half of 2009. Chase's December press release was surprising. They are almost doubling the number of centers they have. They did not indicate the reason for this.
Why Would Chase Suddenly Double the Number of Their Home Ownership Centers?
Could it be that Chase realized that they were not following the guidelines of the Making Home Affordable Modification Program? Could they be admitting that in order to process all of the requests for loan modifications that they have received the bank basically had to double the staff they have assigned to this work?
Each monthly servicer performance report in the Making Home Affordable Program released since August of 2009 has shown that each mortgage company in the program has been doing a very poor job of processing the request for loan modification they have received. On Monday, November 30, 2009 the Treasury Department announced that they were sending send three person teams into the eight largest mortgage companies participating in the program. Chase was one of the eight companies. The job of these teams was to monitor the work that the mortgage companies are doing on the applications for loan modifications.
As of mid January, 2010 no reports had been released to the public on what these teams have found. However, the Treasury Department has had to start discussing their findings with each individual mortgage company.
Could the findings of the team sent into Chase found have triggered the company to increase their staff processing applications for loan modifications? Could they have feared that a negative report by the team would damage Chase's reputation?
Chase's Poor Performance in the Making Home Affordable Program in 2009
Through October of 2009 Chase had made offers for trial modification on 182,622 loans where people were facing foreclosure. This was 43% of the loans it was estimated Chase had that were eligible for trial modifications. Out of the 182,622 loans, trial modifications had commenced on 133,988 loans. That is 73% of the total.
The report for November reveals that the total number of loans on which trial modifications had been offered increased to 199,033. This was 44% of the total. Trial modifications had actually commenced on 136,686 loans or 71%. In The November report, the Treasury Department started to report the number of loans where the modifications had been converted from trial to permanent. At Chase this was 4,302 or 1% of the total.
The December report indicated that trial modifications had been offered on 210,533, 49.5% of the total. Trial modifications had actually commenced on 146,828 loans or 73%. The number of permanent modifications increased to 7,139 or 2%.
As can be seen from these numbers, Chase is doing a decent job of starting trial modifications on loans after an offer has been made. For the last three months of 2009 they have been above 70% here.
Two Areas Where Chase is Having Problems
The first is in making offers for trial modifications on the loans eligible for them. In the last 3 months of 2009, offers have been made on less than half of the loans it is estimated Chase has which are eligible for them.
This does not mean that the people with these loans who are facing foreclosure have not applied for a loan modification. It can point to the severe problem that all of the mortgage companies have had. People have applied to have their loans modified. The companies have not had sufficient staff or the proper system in place to process them. Many times people have submitted documents only to be told that they cannot be found. They have been asked to submit them over again. Some have had this happen to them more than once.
The second problem is with the number of loans where the conversion has been made from a trial loan modification to a permanent one. For Chase to have only 2% of these loans convert to permanent modifications by the end of 2009 is a disaster.
In the original guidelines for the Making Home Affordable Program, a person facing foreclosure was to submit the documents needed to their mortgage company at the time they requested to have their loan modified. The mortgage company would review all of the documentation submitted. That review would show whether the person was eligible for a trial modification.
Only those people who qualified for a temporary modification were supposed to receive one. The trial loan modification lasted 3 months. Each person who made their monthly payments on time during that three month period qualified for a permanent modification. After the third month, the conversion from a temporary modification to a permanent one was automatic.
Permanent modifications were in effect on 7,139 loans at Chase at the end of 2009. This is out of a total of 153,967. That is 5%. If Chase had followed the guidelines for the Making Home Affordable Program, there is no way that number could be that low.
Chase had to be approving people for trial loan modifications before they had all of the documents they needed from them. They then had to hope that they would get these documents during the three month trial loan modification period.
From the statistics on the permanent modifications they did not get the documentation they needed. So they have to get it now.
The only way that this could have happened is that Chase did not have a sufficient staff to handle and process the work connected with Making Home Affordable Program. That is the reason they are almost doubling the number of their Home Ownership Centers.
What Does This Mean?
People facing foreclosure who have a loan with Chase and desire to save their home will benefit from these changes made by Chase. When they apply for a loan modification, their request should be reviewed more quickly.
Anyone requesting a loan modification should deliver it directly to a representative at the Home Ownership Center closest to where they live. That way Chase will not be able to say they never received any of the documents.
If they don't live close to a center, they should call the closest center, talk to a representative. Get that person's name and send them the application and documents by express mail. They should follow up with them within a week to verify that they have received it.
Regardless of the whether they drop off the application and documents off at a center or send them to one, anyone facing foreclosure should not represent themselves. They should have lawyer or an expert in loan modification represent them. There is too much at stake for them to try to represent themselves.
