It’s been four months since the nation’s largest banks reached a $25 billion settlement with the U.S. Justice Department and 49 states over alleged foreclosure abuses.
In New Hampshire, the deal means $43 million to help troubled homeowners.
The Attorney General’s Office says banks have slowly begun to take action.
Despite improvements, some say its clear homeowners need more help.
Dan Gorenstein (DG): For the past five years, Mary Stewart’s seen banks and mortgage servicing companies make life hard for her clients.
The Concord-based attorney’s keeping an open mind about the bank settlement.
But right now, she’s got one client who’s not getting much relief.
Stewart: “The borrower went through the process to get a modification on the mortgage. Made payments on that. And then the servicing of the mortgage is transferred to a new servicer, and that new servicer refuses to honor the modification.”
DG: The attorney general says there’s nothing that requires a new servicer to honor a mortgage modification.
But Stewart’s complaint is the kind that the Attorney General’s Office can at least follow up on now.
Before the agreement, Assistant Attorney General Robert Adams didn’t have some direct way to call banks officials.
That simple thing – a special contact – allows Adams to pursue one of the most common complaints the Attorney General’s Office has received.
Adams: “Borrowers were getting the run around. Being asked to produce the same documents over and over again. They couldn’t get their calls returned. Kind of went into limbo, got conflicting information.”
DG: One key element to the deal with Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, was that so-called servicing standards would improve.
Servicing standards ultimately means the process a bank or mortgage servicing company follows...providing certain information and being helpful, prompt, and competent.
Adams is monitoring that closely.
Adams: “There’s still a lot of things that could be improved.”
DG: Overall, the assistant attorney general says banks have been slow to get out of first gear when it comes to refinancing deals, or reducing principal.
He knows Bank of America has reduced principal for eight homeowners in New Hampshire, worth about $100,000.
Beyond that, he doesn’t have hard numbers.
He says his sense is that people struggling to stay in their homes are a little better off than before the settlement.
Adams: “They are getting some calls returned, or they are getting a second look at what their problem was. We have a number of people whose foreclosures have been postponed.”
DG: Going into this, no one had any illusions the settlement would solve the foreclosure crisis in New Hampshire.
Adam’s best guess is several hundred homeowners will see some real relief.
But in just 2012, 3,500 people are expected to lose their homes to foreclosure...that’s the state average over the past several years.
There’s a belief among housing advocates like attorney Mary Stewart that New Hampshire must do more.
She wants to see the state’s Consumer Protection Act expanded to allow the attorney general and individuals to sue banks and servicers for unfair or deceptive practices.
Stewart: “People of New Hampshire don’t have somebody representing their interests...and I think it’s beholden on the Legislature to address some of these issues.”
DG: This is one of those perennial issues that the Legislature seems to take up nearly every year.
Christiana Thornton, head of the New Hampshire Banker’s Association, opposes that kind of expansion.
She says more litigation could drag out the foreclosure process and raise costs, for everybody.
On top of that, at least as far as banks are concerned – she says they’re pretty well regulated.
Thornton: “FDIC, the state Banking Department, federal regulators are coming into banks on a regular basis. Every 18 months coming into examine a bank to make sure they are treating customers fairly.”
DG: In New Hampshire, the only option for people with concerns right now is to file a complaint with one of those regulators.
Elliott Berry, an attorney with New Hampshire Legal Assistance, says in a world of limited resources the state and federal agencies have to target their efforts.
Berry: “You have to pick and choose, and the agencies are going to try to focus on the cases that have the broadest impact. In doing so, it’s going to leave out a lot of cases where it’s really important to the individual but doesn’t have much impact beyond the individual.”
DG: Berry – who has argued for greater consumer protections in the past – thinks there’s more concern about the banking industry than ever before.
But, he still says he wouldn’t bet his house on a change in the law.