Customer DIS-Service: The Unspoken Reason for
the Continued Collapse of the U.S. Housing Market
We all know about the devastating impact the foreclosure crisis has had on our nation, and we hear countless stories of Americans losing their homes in what has become a total
collapse of the U.S. housing market. But what you don’t hear enough about on your TV screens
or in your newspaper is the absolutely abhorrent customer service from mortgage servicers.
Talk of new government programs to help homeowners, such as the Making Home Affordable program, is superfluous while homeowners and housing counselors alike are at their
wits’ end because of the negligent, disheveled, chaotic and erratic bureaucracies that call
themselves mortgage “servicers.” Millions of home owners who seek help by calling them for
workout options wait on hold for hours, get disconnected or hung up on. They receive different
answers from different departments within the same organization, documents submitted are
regularly lost, and the frustration grows with every phone call.
I am a housing counselor at a nonprofit, HUD-approved housing counseling agency that provides free assistance to senior citizens across California. The following is a list of real-life
examples of how frustrating and difficult it is for a housing counselor to communicate with a
homeowner’s mortgage servicer. I can only imagine what it’s like for an individual borrower
who lacks our sophisticated knowledge and experience.
Citi Mortgage: My client was approved for a trial modification under the Making Home Affordable plan. On
July 27, 2009, he was promised that the paperwork he would need to review and sign would
promptly be mailed to him. On August 10, still no paperwork, and he was facing an August 24
foreclosure sale. I called Citi Mortgage to follow up.
The person I spoke to told me that I was not an authorized party on the account, though a colleague had faxed Citi written authorization with both our names on it several weeks earlier. I
had to hang up and look through the file for it.
After finding the signed authorization with my name on it, I called Citi again. This time a
different representative answered and confirmed that written authorization was indeed on file. I
was placed on hold, and after a couple of minutes, disconnected.
I called right back and this time got the first representative – the one who had said I was
not authorized. She abruptly placed me on hold … and I was disconnected again.
I called a fourth time and was transferred to the voice mail of the representative who was
supposedly handling this homeowner’s file. I left a message explaining the urgency of the matter,
since to implement a trial modification agreement, the borrower needs to sign and return it with
the first monthly trial payment. Otherwise, the foreclosure proceeds.
On August 17 I called Citi Mortgage again and got another representative, who said the
documents had been “ordered” and it could take up to 14 days for them to be mailed out. I
explained that we didn’t have 14 days because the foreclosure sale was scheduled for just a week
later. He placed me on hold, then transferred me again to a person who was allegedly in charge
of this homeowner’s file (a different person from the one whose voice mail I was transferred to
before). I was actually able to speak to her, ever so briefly; she said she was on the other line, but
would place me on hold and get back to me. Several minutes passed, and I was disconnected
again, now for the third time.
On August 20 I called Citi Mortgage yet again. This time I spoke to yet another
representative. After complaining and refusing to hang up without getting some kind of
resolution with the foreclosure sale now only four days away and still no documents mailed to
the homeowner, I finally was able to secure an oral promise to postpone of the sale (they never
come in writing). As of August 28, the homeowner has still not received the trial modification
Countrywide (now owned by Bank of America):
My client was approved for a trial modification under the Making Home Affordable
program. She received the agreement in the mail from Countrywide. Her financial information,
however, had changed since she first applied, so I called Countrywide to update this information.
The representative said the borrower should disregard the paperwork she had received, and that
Countrywide would recalculate the monthly trial payment based on the new financial
information, then send a new set of documents within 30 to 45 days.
The homeowner complied but then started receiving phone calls from Countrywide
representatives warning that the modification was in jeopardy because she had failed to make the
necessary payments and return the signed documentation.
I called Countrywide again. Someone in the Home Retention Department said that there
would be no second set of documents and the plan offered initially remained in effect. She
advised that I call Countrywide’s Hope Department to find out what documents were missing so
the homeowner could send them in.
A Hope Department representative provided the missing document information but said
that the trial modification plan had been terminated due to the homeowner’s noncompliance.
Taken aback, I explained that the Home Retention Department said that everything was fine
based on the initial offer, and Ms. Hope Department then said that I “should probably go with
what the Home Retention Department told you.” I retorted that “probably going with what
another department told me” is not good enough when my client’s home is at stake.
The “Hope” department, huh?
A colleague in our small office was assisting a homeowner whose home was sold but
who was trying to get the sale rescinded due to irregularities in the process. The representative at
Ocwen was not only rude and abrupt, but when she was asked for a copy of Ocwen’s rescission
policy, she yelled “F#@& you!” at our counselor and hung up.
Washington Mutual (now owned by Chase):
My client was behind on his mortgage with WaMu. I called on November 4, 2008, and a
representative in the loss mitigation department informed me that my client’s home was
scheduled for a foreclosure sale on December 2. I requested a loan modification application, and
the representative emailed it to me for my client to complete, sign and return along with the
required supporting documentation.
On November 25, after my client completed the paperwork, I faxed the entire package to
the fax number listed on it. I then called the loss mitigation department to verify receipt. A
representative now told me that to postpone the scheduled sale of the home, now only a week
away, the borrower would have to fax WaMu a copy of a certified check in the amount of $2,762.
There had been no previous mention of this requirement.
Fortunately, this borrower was able to obtain the funds, and on November 26, I attempted
to fax the check , along with the rest of the modification package, to WaMu. The transmission
failed. I called WaMu and spoke to another representative who gave me her direct fax number
and had me place her on hold while I faxed her the documents. She confirmed that all the
documents were received and she would place a request for postponement of the foreclosure sale.
I called WaMu on December 1 to confirm and was told the sale was postponed to January
Then on December 5 I called to check the status of the loan modification review. I was
told a “negotiator” had not been assigned to the file, and that it could take a week or two. I called
back on December 22 and was told the same thing. I called again on December 29 and this time
was told that there was no loan modification request “in the system” at all. The representative
told me the documents were never received.
I called again on January 8, 2009, and was informed that the foreclosure sale had again
been postponed, this time to February 3. Still no negotiator assigned. January 27 – same story,
and I was advised to fax the entire package again, this time to a different fax number. The
representative assured me that once the package was received, the sale, now a week off, would
again be postponed.
January 29: a new representative, and again no modification package “in the system.” He
said the fax number the previous representative had given me was “no good” and gave me yet
another one. (I subsequently discovered that the “no good” fax number was the one printed on
WaMu’s official loan modification application packet.)
On February 2 I spoke to yet another representative in WaMu’s loss mitigation department. Still no modification package “in the system.” He gave me his personal fax number
(we’re up to five different fax numbers now). I sent the package to him. He emailed me a written
confirmation of its receipt and that he had requested a further postponement of the sale.
On February 3, at 6:06 a.m. Pacific Standard Time (the foreclosure sale was scheduled
for 10 a.m.) I received an e-mail from the same representative, instructing me to fax a copy of
the borrower’s certified check to someone named Doris. But he did not provide a fax number. He
just instructed me to call the general WaMu loss mitigation number. I called and amazingly,
obtained a fax number for Doris. I faxed the copy of the certified check to Doris’ attention,
called WaMu again and spoke to yet another representative, who asked me to fax her the copy of
the check. I did so and, came back on the line … only to be told that she did not receive it. She
placed me on hold for several minutes, then came back on and said nothing could be done to stop
the sale of the home.
I had sent the loan modification application and supporting documents to seven different
fax numbers (confirmation printouts are in my file) and spoke to more people at WaMu than I
can count. But my client’s home was sold in foreclosure anyway. Unbelievable. Not only were
there egregious and disgusting levels of negligence, but also multiple misrepresentations made to
me by employees of Washington Mutual/Chase.
Another colleague was assisting a 74-year-old woman facing imminent foreclosure. He
helped her apply for the Home Affordable Modification Program with Wells Fargo. The
representative he spoke to said that the elderly borrower would not be considered for HAMP
because the sale of her home was scheduled within 10 days. This is a blatant violation of the
rules set out by the Treasury Department for the program. The pertinent supplemental directive
from the Treasury Department states: “To ensure that a borrower currently at risk of foreclosure
has the opportunity to apply for the HAMP, servicers should not proceed with a foreclosure sale
until the borrower has been evaluated for the program.”
After numerous e-mails, letters and phone calls, my colleague finally got an answer a
month later from Wells Fargo’s “loss fulfillment manager,” stating it is not the bank’s policy to
deny borrowers consideration under Making Home Affordable just because the scheduled
foreclosure sale of their home is within 10 days. This official also promised to personally train
the entire loss mitigation department to ensure that this type of violation of the program does not
If the entire loss mitigation department of one of the largest mortgage servicers in
America still needs training on an issue as fundamental as this, we’re all in trouble.
* * *
If it’s this hard for a housing counselor, what is the poor homeowner supposed to do? “Call a nonprofit, HUD-approved housing counselor,” say all the government brochures and
broadcast public service announcements. But housing counseling agencies like ours cannot
possibly handle the flood of calls for help we receive on a daily basis. Thousands of low-income,
seniors, many with limited English, who can’t get through to us quickly get lost in the servicers’
phone systems without ever speaking to anyone at all. If they do get lucky enough to speak with
a representative, how many have the e-mail or fax capability needed to proceed?
This makes an already a dire situation even worse, and is all the more reason why something needs to be done to improve the quality of mortgage servicer customer service
There can be no doubt that innumerable Americans have lost their homes simply because of the negligence (or worse) of a mortgage servicer, who, by the way, has more of an incentive to
foreclose than to do a loan modification (see “Lucrative Fees May Deter Efforts to Alter Loans,”
by Peter Goodman of The New York Times, July 29, 2009).
The government can come up with all the loan modification and refinance programs it
wants, but if homeowners in this country can’t communicate with their mortgage servicers, it
California Senior Legal Hotline,
Legal Services of Northern California, Sacramento