Wide variation seen in mortgage servicers’ performance
When Meghan Faux, a lawyer and foreclosure counselor in New York, calls JPMorgan Chase & Co. to help a homeowner modify a mortgage, she expects the runaround from representatives unwilling or unable to answer basic questions about the borrower’s case.
She’s more hopeful calling Wells Fargo & Co., which like Chase is one of the three largest mortgage servicers, along with Bank of America Corp.
“There’s still a long way to go there,” Faux said of Wells Fargo. “But they are at least responsive to our concerns.”
All mortgage servicers — which collect monthly payments, deal with delinquent homeowners and negotiate loan modifications — have come under a harsh spotlight in recent weeks over their foreclosure paperwork. But the available data suggest a wide variation in how well the firms do their jobs.
A number of federal and state agencies are investigating the servicers’ foreclosure practices. Housing and Urban Development Secretary Shaun Donovan said last week that there were “significant differences” among the companies but declined to elaborate.
Faux’s experience at South Brooklyn Legal Services is borne out by the Better Business Bureau, which gives Wells Fargo’s mortgage servicing operation an “A” grade and Chase’s an “F.”
And of the calls about Chase to the Treasury Department’s foreclosure help line through August, 7.2% were complaints, the second-highest percentage among the eight largest servicers. San Francisco-based Wells Fargo had the lowest proportion of complaints, 3.7%.
J.D. Power & Associates, the customer satisfaction specialists in Westlake Village, recently gave Wells Fargo the highest rating among large servicers. Chase came in near the middle.
Chase spokesman Tom Kelly declined to comment on the ratings or the Treasury data, except to say the company had “offered struggling borrowers more than 975,000 modifications since the start of last year.”
Bank of America, which became the largest mortgage servicer after buying home-loan giant Countrywide Financial in Calabasas two years ago, gets mixed reviews. The bank’s servicing unit has an “A” grade from the Better Business Bureau but doesn’t fare as well with J.D. Power or the Treasury’s help-line stats.
Among the 4,327 complaints about Bank of America received by the Better Business Bureau in the last three years, one recent submission points to the frustrations many homeowners are experiencing with servicers.
On Aug. 31, a customer wrote that he called Bank of America five times after receiving a default notice and was directed to five different representatives, none of whom picked up the phone or called him back. Meanwhile, the homeowner said, his monthly payments were jacked up with no explanation to $947 from $680.
“I don’t want to lose the home I grew up in because Bank of America is playing games,” the borrower wrote.
Bank of America told the Better Business Bureau that it would resolve the problem, but when the bureau checked with the customer on Oct. 8, little had changed, the bureau reported.
“I’m getting nowhere,” the customer wrote. “I need help!”
BofA spokesman Richard Simon said the bank “recognized past inadequacies and disappointments in our service levels” and had made “many changes leading to tremendous strides.”
The variation in the ratings of servicers reflects in part their different customer bases. For example, companies that specialize in handling certain types of mortgages, such as subprime loans, that have had high default rates are more likely to have unhappy borrowers. One example is Pasadena’s OneWest Bank, which bought the remains of failed IndyMac Bank, including its many mortgages issued without proof of the borrower’s income.
In the past, homeowners may not have cared who handled their loans. But borrowers are coming to realize that servicers aren’t all the same, even if their impressions are based on their last bad experience, said Jim Svinth, executive vice president at Irvine mortgage banking firm LoanDepot.com.
Svinth recalled, “One of the loan processors told me the other day, ‘The buyer is in tears. The reason they refinanced was to get away from that same bank.’ ”
Times staff writer E. Scott Reckard contributed to this report.
