Despite several industry leaders claiming that poor servicing still abounds, a new report has claimed servicers are lifting their game.
Industry leaders last week told MPA that poor mortgage servicing was leading to a borrower "death spiral" which saw many homeowners unnecessarily tossed from their homes. But the first quarter Making Homes Affordable Report has indicated that servicers such as Bank of America, CitiMortgage, GMAC Mortgage, JPMorgan Chase and Ocwen Loan Servicing continue to focus attention on areas identified in previous program reviews, resulting in improved program implementation and better outcomes for homeowners.
“We have kept the pressure on the mortgage industry to step up its efforts, which has helped millions of families access relief in a historic housing crisis,” said Treasury Assistant Secretary for Financial Stability Tim Massad. “Making Home Affordable provides standards and accountability for the mortgage industry that will now help additional homeowners avoid foreclosure through 2015.”
Since inception of the Making Home Affordable Program, Treasury has required participating servicers to take specific actions to improve their processes through ongoing program reviews. The quarterly servicer assessments summarize performance in three categories of program implementation: identifying and contacting homeowners; homeowner evaluation and assistance; and program reporting, management and governance.
The report showed servicers are more effectively evaluating homeowners under program eligibility criteria as seen in the “second look disagree” category, which reflects the rate at which program reviews disagree with the servicers’ decision to find a homeowner ineligible for assistance.
Mortgage servicers continue to accurately calculate homeowner income, which is used to determine a homeowner’s eligibility and modified payment amount under the program. The majority of servicers have income calculation error rates below the established benchmark, according to the report.
All servicers have been directed to strengthen implementation in a few key areas, including timely and accurate reporting of program data and ensuring the timely assignment of a single point of contact (SPOC) to homeowners.