Mortgage relief plan falling short

Professionals working with homeowners facing foreclosure also complained that the program was falling short in its mission.

“I am a bankruptcy attorney in California,” wrote Randy Walton, of Modesto, Calif. “I have sent countless clients to the toll-free number 888-995-HOPE. Almost every client has returned to my office for bankruptcy relief because either: (1) nobody answered the toll free number (a recording explains that ‘thousands’ of people call every day); or (2) the ’counselors’ could not or would not help them.”

“I am a 30-year mortgage industry veteran and called the number just to be left on hold and told they were busy and (the) call disconnected,” wrote Jane Martin, a financial advisor in Alexandria, Ind., who specializes in mortgages. “This is unacceptable and explains the failure of the program.”

Hope Now officials also say the frustration reported by msnbc.com readers may be due, in part, to a misunderstanding about the program’s scope.

“(Many callers) report that they are calling for a variety of reasons including looking for grant or rescue funds, wanting general information, needing to know how to contact their servicer, qualifying for a rate freeze or needing to talk to their servicer,” said Tracy Morgan, communications director for the Homeownership Preservation Foundation, which operates the hotline for the alliance. “Every caller is not necessarily a candidate for counseling for these reasons.”

In addition, not all callers have a realistic hope of saving their home. For some, say credit counselors, the best option may be to sell the home and avoid the foreclosure process and resulting damage to their future ability to get credit.

But some readers reported much more basic problems — like getting through to speak with a counselor.

“The wait time was 30 minutes to an hour just to get a machine that told me the wait time could be up to an hour,” wrote Elizabeth Valovich, of Hot Springs, Ark. “It was ridiculous. For a person already under stress of possibly losing their home and creditors calling constantly at all hours of the day and night harassing, it is the proverbial straw that broke the camel’s back.”

Hope Now officials said some readers who reported trouble getting through may have encountered delays resulting from call spikes when the program was launched in October and again when the White House promoted the line at a Dec. 6 news conference.

The Homeownership Preservation Foundation, which operates the hotline for Hope Now, reports that in February, the average response time to answer calls was 25 seconds; that 78 percent of callers were transferred to a counselor in less that three minutes; and that the call “abandonment rate” — those who couldn’t get through — was 6 percent.

In recent spot checks performed by msnbc.com, calls went through to operators quickly after a 60-second pre-recorded message.

Many callers who did get through said they were unable to work out a loan modification or payment plan for a variety of reasons: They were told their credit score was too low; their loan was bigger than the value of their home; or they couldn’t be helped because their loan was already in foreclosure. One reader reported being told help was available only if they were behind in their payments; another that said they had to be current.

Part of the confusion stems from the fact that lenders and mortgage loan servicers have developed multiple modification programs with different guidelines and qualifying criteria, said Morgan of the Homeownership Preservation Foundation.

“We are able to provide counseling regardless of whether or not they fit (those programs) and connect them to that servicer to continue that conversation if it’s appropriate,” she said.

But because the final decisions are made by individual lenders, the outcomes may vary for homeowners in similar circumstances.

As the pace of foreclosures has risen, the Hope Now hotline has ramped up to meet big increases in call volume. A year ago, the hotline was staffed with 64 counselors from three HUD-approved independent counseling agencies. By October, when the hotline joined the Alliance, calls were fielded by 150 counselors from five agencies. Today, the line is staffed by 450 counselors from 10 agencies.

But some critics say the program simply hasn’t ramped up fast enough to handle the growing number of homeowners in trouble.

“Every time I see a new projection on the number of homeowners that are going to be impacted in the next 12 months, that number gets larger,” said Susan Keating, CEO of the National Foundation for Credit Counseling, which has over 100 member agencies across the country. “We’re now six months into the Hope Now hotline, and we just haven’t seen enough progress commensurate with the need out there.”

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