Ohio Senator fires a broadside at the banks

• The Senator for Ohio writes a personal letter to Bank CEO’s
• Will this have any effect?

The Democratic Representative for Ohio and Member of the Senate Banking Committee has sent a personal letter to America’s four biggest banks, urging the lenders to work more carefully with responsibly minded troubled American homeowners, and find ways to avoid foreclosing on their homes.

The letter that the Senator sent personally to the Chief Executives of Wells Fargo, JPMorgan Chase, Bank of America and Citigroup, cites his ongoing frustration over the “disproportionate number of complaints” that his office receives regarding the “ability and willingness” of banks and their subcontracted agents to help troubled American borrowers “navigate” through Washington’s mortgage modification and short sale programs. It goes on to refer to the latest foreclosure statistics for the State of Ohio that he represents. These reveal that one in six Ohioans are at least 30 days part due on their mortgages, and that one in three property sales taking place in Ohio involve “troubled property”.

The Ohio Senator goes on to list the following complaints as the most frequent that his office receives in connection with mortgage banks and foreclosures:

• Repeated requests to re-complete and re-submit HAMP applications
• Foreclosures while trial mortgage modifications are still in place
• Being recorded as being in arrears during mortgage modification trials
• Unnecessarily long drawn out short-sale processing
• Poor responses to status enquiries on HAMP and HAFA applications

“It is in the best interest of your banks to work with responsible borrowers to help them stay in their homes or find other alternatives to foreclosure,” Senator Brown wrote. He went on to encourage the banks to take a “hard look” at the communication styles and cultures in both their and their affiliate’s offices, and also to seek to establish to extent to which “any shortcomings in these areas are hindering” compliance with the objectives of HAMP. “For example,” he continued, “consider the effects that fee arrangements and other economic incentives have on the mortgage modification process as your third-party mortgage servicing contracts come up for renegotiation to ensure that these agreements are promoting, and not hindering, modifications.”

In sending out the letter, Senator Brown was no doubt mindful that Ohio also ranks 48 out of 50 States in terms of the successes of homeowners in having their modifications approved. A mere 15% of delinquent loans in the State have been modified, and only 8% of trial modifications have been successful.

While there can be few Americans outside of the banking industry lobby who would disagree with the contents of the letter sent by the Senator for Ohio, it remains to be seen whether bank officials in the State will take his words seriously, or just ignore them and carry on as usual.

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