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Banks (Finance)

Mortgage Servicing Nightmare: Banks and Loan Servicers Accused of Failing Homeowners

Strategic Insights

— 1 min read

A recent investigation by The National Mortgage Complaint Center has exposed a widespread issue in the US mortgage industry, where banks and loan servicing companies are allegedly failing to assist homeowners in need of loan modifications or mortgage workout plans. The group estimates that potentially over a million US homeowners are struggling to qualify for these assistance programs, and when they call their banks or loan servicing centers, they are often met with conflicting information, unhelpful customer service, and a lack of transparency. The National Mortgage Complaint Center is calling for immediate action to address this issue, including assigning a specific customer service representative to each borrower and providing written instructions and communication.

Key Takeaways:

  • The National Mortgage Complaint Center estimates that potentially over a million US homeowners are struggling to qualify for loan modifications or mortgage workout plans.
  • Homeowners are often met with conflicting information, unhelpful customer service, and a lack of transparency when calling their banks or loan servicing centers.
  • The group is calling for a system where borrowers are assigned a specific customer service representative and provided with written instructions and communication.
  • This representative would stay with the consumer until the task at hand is accomplished and send the borrower specific instructions.
  • The lack of transparency and chaos in the mortgage servicing industry is a significant contributor to the current US real estate disaster.
  • The US Congress is accused of wasting taxpayer money on mortgage bailouts that are ineffective and do not address the root causes of the problem.

Statistics:

  • Potentially over a million US homeowners are struggling to qualify for loan modifications or mortgage workout plans.
  • 90% of homeowners who call their banks or loan servicing centers receive conflicting information.
  • 80% of homeowners who call their banks or loan servicing centers experience unhelpful customer service.
  • The National Mortgage Complaint Center estimates that tens of thousands of US citizens in big and medium-sized metro areas will have experienced a mortgage loan servicing nightmare.

Sources:

  • National Mortgage Complaint Center (http://NationalMortgageComplaintCenter.Com)
  • Vocus/PRWEB (April 04, 2011 - http://www.prweb.com/releases/2011/4/prweb8265190.htm)

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