Getting a mortgage modified should be significantly easier as of today - assuming five of the nation's largest lenders deliver on promises they made in a $25 billion settlement signed six months ago.
Today is the deadline for Bank of America, Wells Fargo, JP Morgan Chase, Citigroup and Ally Financial to implement hundreds of improvements to customer service for home loans.
The dollar figure was the sexy part of the settlement with state attorneys general when it was first announced: Five of the country's biggest banks agreed to spend $25 billion forgiving debt and helping homeowners avoid foreclosure.
But today marks the really big deal for people on the front lines of the foreclosure mess.
"I think the servicing standards are a lot more important than people give them credit for," says Mike Cherry, president and CEO of Consumer Credit Counseling in Springfield, Missouri.
The settlement set today as the deadline by which the banks must be following 304 new rules for dealing with mortgages. (Remember, this whole settlement was sparked by the discovery that banks had been almost robotically approving foreclosures without actually verifying the loan documents.)
Raleigh housing counselor Sheryl Merritt says one of the best new rules requires the banks to give homeowners a single point of contact, "meaning that consumers don't have to talk to several different people when they're trying to find out what the status of their loan modification or forebearance is. They can call one phone number, speak to one person or leave a message for that person and expect a timely response."
Merritt is with a nonprofit called Consumer Education Services.
Another big change for housing counselors like her is a rule prohibiting the banks from moving ahead with foreclosure on a home while simultaneously negotiating with the homeowner to make the mortgage more affordable.
An initial report from the monitor of the settlement found all five of the banks had made progress toward implementing the new rules before today's deadline. Merritt says she's seen some progress - particularly with Bank of America - but she's wary of the good the settlement will do for the millions of people facing foreclosure and those in homes now worth far less than they owe:
"To be honest, right now I'm still unsure as to what the outcome is gonna be," says Merritt. "Just the sheer fact that we're talking about 304 servicing standards, I mean that's overwhelming by itself."
The monitor assigned to enforce the settlement is Joseph A. Smith, Jr. At a meeting of housing counselors in Charlotte yesterday, he asked for their help keeping the banks honest about the new standards.
"I can call and ask, 'Is it in place?' and the servicer will say, 'Well sure it is,'" quipped Smith. "What are they gonna say? 'Nah, we didn’t' mean it.' They're gonna say, 'Yeah.' You are dealing with people and you will know."
Smith is collecting complaints from housing counselors and consumers on his website - mortgageoversight.com.
Now that the deadline to implement the servicing standards has arrived, Smith says he's hired auditors to begin probing the banks for details of their compliance.