WAITING FOR CHANGE: DUAL TRACKING AND HOME FORECLOSURE THE FIRST REPORT OF THE CALIFORNIA MONITOR

“The California Monitor Program received 224 complaints about dual tracking since the Settlement was announced. The bad news is this clearly understates the degree of the problem. Most families do not file a complaint, and even among the 1,482 total complaints received, some may focus on confusing communication from their banks, meaning my staff doesn’t realize dual tracking is occuring into well into its work to help the family. The good news is the trend line is sharply downward in September. As the chart shows, dual tracking complaints were half as frequent last month.” ~ Katherine Porter

Summary

Tomorrow, October 3, the National Mortgage Settlement takes full effect. The nation’s five largest mortgage companies must implement new, stronger rules for working with homeowners who are facing a hardship. These reforms require banks to make fundamental changes to their businesses. It should be a bright day for all who care about principles of fairness and the California housing market.

This report, the first from the California Monitor, focuses on dual tracking. Dual tracking is the name given to a race between foreclosure and loan modification. This practice allows mortgage companies to manufacturethe foreclosures of homes and the displacement of families—even as those families fight to stay in their homes by requesting loan modifications. In my view, the Settlement’s restrictions on dual tracking are at the heart of changes that will give families who have fallen on hard times a fair chance to keep their homes.

The Settlement did not change the loan modification landscape overnight, nor did it promise to do so. Under the agreement, mortgage companies had six months to change practices that were harmful to homeowners.

In California, dual tracking was widespread during this time. The report reflects the fear and frustration of California families while the mortgage companies retooled their practices. In August, 25% of complaintsreceived by the California Monitor stated a dual tracking problem. However, this number began to trend downward in September. With the end of the implementation period, I will continue to monitor the mortgage companies’ actions and listen to homeowners. When a home is on the line, rhetoric is no substitute for real, measureable change.

The announcement of the $25 billion National Mortgage Settlement brought hope to thousands of families struggling to avoid foreclosure. Attorney General Kamala D. Harris appointed me as California Monitor to make sure those hopes were not dashed by delay or deception on the part of mortgage companies.

But consumers should not need a law professor as their ally to ensure fair process. While the California Monitor Program has worked successfully with mortgage companies to stop foreclosure sales in several dozens of dual tracking situations, the Settlement’s protections place accountability on mortgage companies to treat their customers fairly or face real consequences if they continue to dual track.

It is my honor to serve Californians. My staff and I are working hard each day to ensure that every family struggling to avoid foreclosure has a square shot at keeping its home. I look forward to making future monthly reports and informing Californians of our progress at http://www.californiamonitor.org.

Very truly yours,

Katherine Porter

Copy of the full report here…

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