Caldwell: BofA reaches out to help troubled mortgage holders

Bank of America recently notified 2,500 customers with mortgage problems they could meet face-to-face with bank representatives who might be able to fast-track modifications that would keep them in their homes.

Ethan Churchill threw his away.

The student/teacher at Eastern Washington University says he and his wife had called the bank multiple times for more than two years trying to work out a solution to mortgage problems that developed when his father-in-law became terminally ill. They had been making their monthly payments and then some for 18 months to catch up with their arrears.

Still, the bank threatened to foreclose. They threatened to file bankruptcy.

“It was just a real ugly thing going on,” Churchill says.

Then his mortgage counselor at SNAP recommended he take the bank up on its offer.

A week ago Friday, the Churchills walked out of the Spokane Convention Center with a new mortgage.

“In about four hours, we were able to settle all of it,” he says. “This face-to-face thing was really helpful.”

Bank of America persuaded the investor holding the mortgage to accept terms that moved past-due payments to the end of mortgage term, and fixed what had been an adjustable rate at slightly below 7 percent.

“We get to keep our house,” a pleased Churchill says.

Other supplicants also had happy outcomes. Bank of America spokesman Rick Simon says 23 of the 146 customers who came in for counseling left with a modified mortgage. Of that 23, 21 were more than four months delinquent on their payments.

The 17 percent success rate is comparable to the 18 percent the bank has achieved at other customer outreach events around the country, including one held last weekend in Bellevue, he said. And many who left without a modification may yet qualify if they can produce documents they did not bring with them last week. Others will have a better understanding of just what it is they must do to get right with their lender.

Churchill says all he got on the phone was scripted responses that led him nowhere, and there are many more Spokane homeowners who have had the same frustrating experience.

So Simon says Bank of America was puzzled by the relatively low turnout in Spokane and, to a lesser extent, in Bellevue. On Friday afternoon, most of the 50 bank “home retention specialists,” underwriters and support people on hand were staring into their computers. There wasn’t a customer in sight, although a few may have been behind screens set up for privacy.

Only 10 percent to 15 percent of the 2,500 who were notified of the event made an appointment. Most skipped out. Less than 6 percent of a group that was at least two months behind on their mortgages showed up.

Distance was an obvious factor. Notices were sent to homeowners as far as 200 miles from Spokane. Simon says Northwest residents may not have the sense of urgency that has propelled homeowners in Florida and Southern California to outreach events there. In California, 45 percent of all homes sold in the first quarter were foreclosures, according to online seller RealtyTrac. Inc. The rate in Washington was only 16 percent.

Still, Bank of America has announced it will open a mortgage outreach center in Seattle to provide ongoing service to customers. Simon says the bank plans to rotate a home retention specialist from that office through Spokane to give Inland Northwest customers an opportunity for face time with a real person.

In helping customers, the bank helps itself.

Bank of America services $13.1 trillion in mortgages, and holds about 20 percent of all mortgage debt, Simon says. Buying Countrywide Financial Corp. — source of five of every seven mortgages on its books — has been a multi-billion fiasco. Investors who bought securities backed by those mortgages are suing.

So the bank is reaching out, finally. Too bad so few homeowners struggling with their mortgages did not reach back.