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Cascade: No. 66, Fall 2007

Conduits to Consumers

At least a dozen servicers are providing single points of contact to nonprofit housing-counseling, legal-service, and housing-advocacy agencies, giving staff of the agencies expedited access to the servicers through dedicated toll-free phone numbers and e-mail addresses.

Donna Sheline, director of JPMorgan Chase’s homeownership preservation office (HPO), said the nonprofits can play a critical role by educating consumers on the available options. Heidi Coppola, director of mortgage finance in Citi Markets and Banking (Citi’s investment bank), observed that consumers view the nonprofits as “independent and trusted” and will sometimes talk to them when they won’t talk to servicers.

Citi, GMAC-ResCap, JPMorgan Chase, Litton Loan Servicing, L.P., and Wells Fargo Home Mortgage indicated in interviews that they have:

  • Held meetings with nonprofits in cities in which they have sizable mortgage-loan portfolios in order to explain loss-mitigation options and requirements;
  • Held meetings for homeowners to provide education on the alternatives available to avoid foreclosure; and
  • Joined task forces with nonprofits and government agencies at national, regional, or local levels.

JPMorgan Chase’s HPO has held over 50 foreclosure-prevention training events attended by 1,800 nonprofit housing counselors, regulators, public officials, and others. JPMorgan Chase plans to conduct another 25 events this year.*

Litton Loan Servicing, L.P., met earlier this year with community organizations in Ohio and signed memorandums of understanding with the East Side Organizing Project in Cleveland and Working in Neighborhoods in Cincinnati. The agreements, which were requested by the community organizations, discuss the two parties’ commitment to work together, plans for communications including face-to-face meetings and how housing counselors will work with Litton’s servicing staff.

The response of homeowners to the educational meetings held by the five servicers has varied widely. In one instance a servicer cancelled an August 2007 meeting because of very low enrollment.

The five servicers have varying policies on reimbursing nonprofits for counseling and budgeting work. One servicer has not entered into agreements to reimburse nonprofits for housing counseling in a fee-for-service arrangement, although it does provide general operating grants to some of the nonprofits. Another pays nonprofits only when it asks them to provide counseling.

Servicers are engaged in a wide range of pilot programs with nonprofits and investors, including Fannie Mae and Freddie Mac. Wells Fargo Home Mortgage has a national pilot program with one of its investors aimed at identifying loss mitigation opportunities with Chapter 13 bankruptcy borrowers who have recently become delinquent on their post-petition payments, explained Joseph Ohayon, the company’s vice president of community and client relations. Wells Fargo is working with bankruptcy attorneys to extend loan modifications to homeowners who meet the terms and conditions of the program, which will result in effectively curing the delinquency if agreed upon, he said.

Sheline commented: “In the last three years, the dialogue between servicers and nonprofit housing counselors and housing advocates has come a long way. Through open communication, education, and mutual respect, we are able to better understand the respective value each can provide on foreclosure prevention.”

For information, contact Robin Kramer of Citi at robin.kramer@citi.com, Mark Folweiler of GMAC at mark.folweiler@homecomings.com, Donna Sheline of JPMorgan Chase at donna.j.sheline@chase.com, Donna Marie Jendritza of Litton Loan Servicing, L.P. at donnamarie.jendritza@litton.c-bass.com, and Joseph Ohayon of Wells Fargo Home Mortgage at joseph.ohayon@wellsfargo.com.

The five servicers have established the following single points of contact for housing counselors: Citi, 866-517-0820, Mortgagehelp@citigroup.com; GMAC, Mark Folweiler (contact person for Pennsylvania, New Jersey, and Delaware) at (215) 734-5359 or mark.folweiler@homecomings.com; JPMorgan Chase at (866) 345-4676 or hpo.chase@chase.com; Litton Loan Servicing, L.P. at (713) 218-4592 or executiveresolution@litton.c-bass.com; and Wells Fargo Home Mortgage at (866) 480-5004.

  • * JPMorgan Chase’s HPO has also provided training events for realtors on short sales.