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Tess Vigeland: Homeowners who are seriously underwater on their loans might still be able to grab onto the government’s life raft. The Obama administration is expanding its mortgage-rescue efforts to include borrowers who owe up to 25% more than their home is worth.
So far, the Making Home Affordable program has received mixed reviews. People looking for help say they’re subjected to a maze of automated messages and less-than-informed answers when they call their banks. Tamara Keith tells us what it’s like on the other side of the line at the nation’s largest loan servicer — Bank of America.
TAMARA KEITH: Bank of America has 14 call centers around the country. This is one of the largest. It’s in Simi Valley, Calif. Two stories with wall-to-wall cubicles as far as the eye can see. This building used to be part of Countrywide, a lender that became synonymous with subprime, predatory lending.
CALL CENTER: Thank you for calling the home retention division. My name is Matthew. Can I ask who I’m speaking with today.
Matthew Coryell is on the front lines at what is now called Bank of America Home Loans, which get about 80,000 calls a day. He answers about 20 of them. The callers are under a lot of stress. Sometimes they yell or they cry. But Coryell has gotten used to it.
MATTHEW CORYELL: If you treat them right and just keep like an even nice tone with them. What I’ve noticed are the ones that are so appreciative at the end of the calls, that are overly really thanking me, are the ones that were many times really upset with me when they first called in.
Here’s the thing though, if you’re having trouble paying your loan, Matthew Coryell isn’t really the guy you want to talk to. He just gathers information, gives out fax numbers and transfers calls. The people on the “workout team” are the ones who can change the terms of a loan.
ZACH HARROD: My name is Zach Harrod. I’ve been with the company for, it’s going to be six years in October.
Harrod is one of more than 7,000 people at Bank of America now working in the home-retention division. The department has nearly doubled its staff in the last eight months.
HARROD: Calling in regards to the modification on your loan, just kinda wanted to go over the terms with you.
Harrod is working the file of a man who lives in Las Vegas.
HARROD: Um, he’s actually currently nine payments behind. So he is, he actually is in foreclosure which typically when we get the loan we’ll put the foreclosure on hold during the review process to allow us time to see what we can do.
Modifying a loan isn’t easy. Bank of America may collect the checks, but most of the loans have been packaged into securities and sold off to investors.
For a modification to work, it needs to be something the borrower can afford and the investor can tolerate. Information about the customer’s income and expenses is plugged into a computer program called Home Saver. The software weighs things like how much the home is worth and what would happen to the loan if the interest rate is reduced.
Bank of America officials say most often changing the terms of the loan is a better deal for everyone than a foreclosure. Harrod sees it another way.
HARROD: It’s more just finding the best deals for the homeowner, you know, really that is my goal.
This sounds like a whole lot of positive spin from a guy who worked for one of the most notorious subprime lenders. Before Countrywide was taken over by Bank of America it put thousands of people into loans that were destined to fail.
But when Harrod says he’s here to help people, you want to believe him. He says things are different now. As the economy has gotten worse, the investors have gotten more receptive to cutting interest rates. Changing the loans so borrowers can actually pay them back.
HARROD: They’re doing a lot more today, to be honest, than when I started doing this a year-and-a-half ago. A lot more.
And so the man from Las Vegas will see his payments cut dramatically. Harrod is moving him from a nearly 8-percent interest rate on a 30-year mortgage to a longer, 40-year loan with a lower rate.
HARROD: He’s down to 2.25 for a year and then he steps up one percentage at a time each year up to 5.25.
Harrod has been working a lot of overtime and weekends, and his desk is never clear. But he says it’s rewarding.
HARROD: Some owners will just send you an e-mail, thank you so much, my kids have a place to sleep at night, and I mean, that’s good enough for me, you know.
When he’s done with this file he’ll move on to another. Odds are it will belong to someone who’s been waiting months for an answer, and there’s no guarantee Harrod will be able to help them keep their home.
In Simi Valley, I’m Tamara Keith for Marketplace.
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