Patricia Gelineau lost her foreclosure battle in late April when a final judgment set a June 4 sale date for her Stuart home. Two weeks later, she got the long-awaited letter approving her for a loan modification with a July 1 start date.
“I was mostly confused and thinking, ‘How can they foreclose when I’ve been working on a loan modification and doing everything they were telling me to do?’ ” Gelineau said.
It’s called dual-tracking — proceeding with a foreclosure while negotiating a loan modification — and it’s a violation of the $25 billion National Mortgage Settlement signed last year by the country’s five largest lenders.
More than a year into the landmark agreement, Florida borrowers and their attorneys say they are still struggling with customer-service issues required by the settlement, such as having borrowers deal with a single bank employee instead of a different person on every call.
According to settlement monitor Joseph Smith, Florida is second only to California in the number of complaints sent to his office with 617 filed between April 2012 and January. The majority involve loan modification and servicing problems.
While one attorney general announced plans to file a lawsuit for lender violations, Florida Attorney General Pam Bondi is handling it in house.
In August, she appointed a full-time analyst whose sole charge is to assist homeowners with the settlement, act as a liaison between borrowers and banks and forward complaints to the monitor’s office, said Jenn Meale, communications director.
Bondi’s office has amassed 293 complaints, including 21 from Palm Beach County.
“If a citizen believes they are not being treated fairly by one of the banks, we ask that they contact our office as the banks will be held accountable,” Meale said.
Still, some foreclosure defense attorneys think a more proactive approach is needed.
“We continue to have a problem with the left hand not knowing what the right hand is doing,” said attorney Michael Wasylik, whose firm has an office in Boca Raton. Bondi, he said, “should be doing more to represent the people of Florida against the abuse still being committed by banks.”
Last week, a report on the settlement showed significant lender progress in meeting monetary requirements. In Florida, 111,913 borrowers have benefited from $8.6 billion in mortgage relief from the five banks subject to the agreement — Bank of America, Wells Fargo, JP Morgan Chase, CitiMortgage and Ally Financial.
Nationwide, more than $48.6 billion has been awarded to 607,015 homeowners.
But with accolades about the quick response on mortgage relief also came concerns about customer service.
Illinois Attorney General Lisa Madigan said her office found that in 60 percent of files surveyed, lenders failed to comply with loan modification deadlines.
“The new servicing standards were supposed to eliminate headaches for homeowners,” Madigan said. “But unfortunately, it seems we’re hearing about the same frustrating experiences.”
Smith, a former North Carolina banking commissioner, said the concerns he’s hearing from Florida are the same nationwide.
“There are still problems around single points of contact and dual tracking,” said Smith, who spoke with Bondi, legal aid attorneys and homeowners in March. “I continue to believe there are areas in which the banks must improve their treatment of customers.”
Smith’s first required settlement compliance report is expected in June.
But New York Attorney General Eric Schneiderman isn’t waiting to hear the findings before taking action. He announced plans this month to sue Wells Fargo and Bank of America for failing to improve their modification time lines.
Schneiderman said he’s documented 339 violations since October. Since the announcement, his office has received more complaints, which it plans to add to its lawsuit, said Schneiderman spokesman Damien LaVera.
Gelineau’s loan modification offer, of which the Palm Beach Post obtained a copy, is from JP Morgan Chase, acting as the servicer for Fannie Mae. It’s dated May 13, but Gelineau said she was told she had been approved in April.
“Then, all of a sudden, I get this notice that my house is up for final sale after I had just been called and told that I was getting a trial payment plan,” Gelineau said.
Gelineau plans to accept the offer and paid $1,500 to have an attorney try either to postpone or cancel the sale.
“I really didn’t have the money to hire an attorney, but I was freaking out and didn’t know what to do,” she said.
TRACKING REAL ESTATE
Kimberly Miller is The Post’s expert on real estate and the housing crisis. Today she highlights concerns that banks aren’t meeting customer service requirements in the National Mortgage Settlement signed last year.
For Kim’s latest local updates: blogs.palmbeachpost.com/realtime