By Steven Piper
Representatives from Bank of America, CitiMortgage, GMAC, HSBC, Litton, OneWest/IndyMac, Wells Fargo and Saxon were in attendance at the “Help and Hope” Foreclosure Prevention and Homebuyer Fair at Long Beach Polytechnic High School last Saturday to meet with borrowers. The event was organized by Los Angeles Neighborhood Housing Services (LANHS). Because of an overwhelming demand for loan modifications, out of a total of 750 people, only 371 individuals were helped with their loans.
With less than a month left before he will foreclose on his home, Hacienda Heights resident Tony Frias attended the fair to speak with a representative from Saxon, a residential mortgage service provider. “I have been trying to modify my loan since last February,” Frias said. “We submit the paperwork, but they keep on saying we are missing documents. Our attorney even has a hard time keeping track of the missing paperwork.”
Frias, a husband and father of two, also said he has recently received notices that he does not qualify for a loan modification because his level of income is too high, yet his home is still in danger of being foreclosed on. He said the fair is a unique opportunity to meet representatives that are oftentimes hard to reach by phone.
Fourteen individuals, however, were on the waiting list to see the Saxon representative, and at 11:30am, two and a half hours after the fair had started, only four people had been seen. Frias was number 12 on the list, and the event was set to end at 2pm.
Loan modification was introduced in February 2009 when the Obama Administration implemented a program called Making Home Affordable– a strategy aimed at stabilizing the housing market while providing relief to struggling homeowners. According to makinghomeaffordable.gov, one million homeowners have received help through the program, and, by 2012, 4 million are expected to have benefited from its services.
Numerous outlets have reported that the overwhelming number of applicants has caused the sluggish response times and under-par customer service complaints about loan servicers like Saxon. Attempts made by the Signal Tribune to contact Saxon regarding the quality and reason for their below-average service have gone unanswered.
For months, Saxon has received negative feedback regarding its customer service and the amount of loans that have stalled out in the modification process– a dilemma in which Frias now finds himself.
ProPublica, an independent nonprofit news organization dedicated to investigative journalism, has reported that 40,000 homeowners started a trial modification with Saxon, a time period set to last only three months until a permanent adjustment could be determined. Less than a quarter have successfully landed a stable modification, and the remainder of the applicants were dropped or are still waiting to hear back from Saxon after making payments in the trial period for more than six months.
The Fort Worth (where Saxon is headquartered) Better Business Bureau (FWBBB) gave the company a rating of D–. The bureau’s report states: “Specifically, consumers allege payments were sent on time, but were not applied to their mortgage on a timely basis or that problems and delays have occurred during their loan-modification process. Consumers also state their phone calls go unanswered. The company has investigated and claims to have made appropriate changes.” In the last 12 months, 195 complaints have been filed by the FWBBB about Saxon, and 678 have been filed in the last 36 months.
Meanwhile, the housing market has continued its turbulent path– in Long Beach, there were a total of 1,318 reported foreclosures in 2009 and a year-to-date of 684 in 2010.
In addition to the banking and loan-service representatives, a host of governmental agencies were also present, including the California Department of Real Estate, the Los Angeles County Department of Consumer Affairs, the California Finance Agency, FHL Bank of San Francisco, and the State of California Department of Financial Institutions.
As well as learning about foreclosure avoidance, participants were educated during new homebuyer seminars, which armed potential purchasers with the knowledge they need to wisely get into the housing market while avoiding foreclosure.
“There are a disproportionate amount of foreclosures in the Long Beach and Los Angeles area,” said Dominique DiPrima, a producer for radio station KJLH, who helped staff a booth that played music throughout the afternoon. “We need to get beyond the shame and get help.”
A full schedule of LANHS seminars and classes is available online.