The birthing of a loan modification: it's approved!

Recently on Crosscurrents, we ran a story about a homeowner who had been trying to get a loan modification for nine months. He placed a call to his loan servicer, Chase, and it sounded like the modification was on the verge of being approved:

ROBERT DAVIS: Everything that they need, they have. And I’m satisfied with that. And we’ve been doing what we supposed to do to make everything happen, so it’s just waiting on the outcome now.

But his counselor, Zack Mack-Westrom with the non-profit San Francisco Housing Development Corporation, wasn’t ready to celebrate yet:

ZACK MACK-WESTROM: I’m gonna be straight up with you and say that I have had clients, like that, call back the next week, they’re missing docs, the modification’s not approved. You can be told one thing by one person one day, and be told the complete opposite the next day by a different person.

Well, there’s a happy ending for the borrower, whom we’re calling Robert Davis. A week after our story aired, he received word that his modification had been approved. KALW’s Zoe Corneli has more.

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ZOE CORNELI: Counselor Zack Mack-Westrom placed the call to tell borrower Robert Davis the good news.

MACK-WESTROM: He said, “I love you man.” (Laughs) So you know, that’s the greatest part of this job is to really know that, you know, on a personal level, you’re really actually making a difference. It can be very frustrating for housing counselors. You have to be very creative, you have to be very patient, and so this is definitely a very tangible success story.

Mack-Westrom believes KALW’s coverage contributed to the positive outcome. He says a couple days after our story aired, he got a call from a Chase representative saying she had seen his name in association with the bank.

MACK-WESTROM: And she called expressing interest in the file, and just straight offered to work with me through the file. And I really appreciated that personal touch, that’s not something that I generally get.  And I said, you know we’ve got this file in process, so if you can do anything to get it pushed through, please do.

Less than a week later, Davis was offered a permanent modification. I spoke with Gary Kishner, Chase’s media relations manager for California. He said it’s possible the story helped prompt the phone call, but it didn’t change the outcome of the case. National Chase spokesperson Tom Kelly says even when there’s no publicity involved, his company proactively tries to help borrowers through the loan modification process, taking what he calls “extraordinary” measures to collect all the required paperwork.

TOM KELLY: So what we do is we will call them 36 times, we will write to them as many as 15 times, and we will go knock on their door twice, to try to get those documents.

Kelly says Chase hired 6,000 new employees in 2009 to deal with the huge influx of loan modification requests.

KELLY: Our preference for any borrower who is struggling with their mortgage, is to modify their mortgage if we can. We think it makes sense for the borrower, it makes sense for their neighborhood, it makes sense for Chase, and it makes sense for the investor who might own the loan. 

But according to a recent report by the investigative news service ProPublica, by one measure, JPMorgan Chase is the worst servicer in the industry. The report found out of the 97,000 borrowers who have been stuck in trial modifications for more than six months, the majority have their mortgages with Chase.

Chase is just one of many banks participating in a federal program designed to encourage loan modifications. It’s called the Home Affordable Modification Program, or HAMP, and it is having some effect. According to government data, the number of permanent modifications made under that program nearly doubled from December to January, to more than 100,000.

In San Francisco, I'm Zoe Corneli for Crosscurrents.

If you are having trouble paying your mortgage, you can get help for free from a HUD-approved housing counseling agency. Here's a list of providers in California.