Will The New "Point of Contact" Plan Fix The Mortgage Mess?

By
Real Estate Broker/Owner with Cornerstone Business Group Inc 0225086119
https://activerain.com/droplet/bmq

Washington is at it again.  If you've ever worked with HAMP or HAFA, you already know that sometimes the cure may be worse than the disease.  Now, the U.S. Treasury is pushing a "single contact" initiative to the largest mortgage lenders using the HAMPHAFA and Up programs.  On the surface, it sounds like a good idea.  Once a borrower is in the process with the lender he is handed off to one person who handles his file throughout the process.  Borrowers are assigned to one person, one point of contact.  That point of contact makes sure the borrower has two methods of contact for him.  He explains all of the possibilities available to the borrower, and they work together to solve the borrowers mortgage issue.

At first glance, I thought, "This is great.  It will make things so much easier for both borrower and lender."  And then, reality settled in.  Wait a minute.  This is the same lender that loses your short sale file on 3 out of 4

attempts to submit.   It's the same lender that pays the current contact $10 an hour to answer the phone, answer your questions from a script and transfer your call to the next person who is going to hear your story.  What could go wrong?


Think about it.  This point of contact will need to understand the mortgage process from loan commitment through loss mitigation.  He will need to know state laws concerning bankruptcy, foreclosure, short sales and deed in lieu of foreclosure.  Most of the current asset managers I deal with handle up to 300 files at one time.  This person will need to handle an insurmountable number of borrower files, as well as, be the one "expert" dealing each one of those borrowers.  He will need to be available throughout the business day to any and all borrowers on his current file list.  Call centers will need to be divided to accommodate this new division for these consenting lenders.  Most mortgage providers don't consolidate bankruptcy, loan modification, short sales, foreclosure or even delinquent borrowers in the same department. That will mean more hires, more equipment, more locations and more overhead. 

I certainly don't want to pour cold water on an att
empt to help with the mortgage mess we're in, but I'm not sure going back to the same people who already make problem loan issues miserable is a good fix.  I definitely agree that somewhere along the line a more streamlined process must be initiated, but is this it?  Beyond the challenges we already face with lenders, is their partner, the US government, who is on the verge of their own bankruptcy the best formulator of a sophisticated mortgage banking shift?  If they can't pay their own bills maybe they need a single point of contact in China.  I guess time will tell.

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Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Mike...

Oh wow, you are right. On the surface, this looks very good. But as you pointed out, the odds of getting a well trained contact could be very difficult.

Featured in the Group "Whacked!!!"

May 24, 2011 02:36 PM #1
Rainmaker
1,503,919
Mike Cooper, GRI
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Richard, I have high hopes that it will amaze all of us, but . . .

May 24, 2011 02:37 PM #2
Rainmaker
160,717
Retired Notworking
Tallahassee, FL

This is why some of us think the government should be as small as possible. No matter what their intentions, they often (usually?) make matters worse.

May 24, 2011 11:35 PM #3
Rainmaker
1,503,919
Mike Cooper, GRI
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Dittos, Colleen.  People who have never been in business should not be making rules for business.  Thanks for commenting!!

May 25, 2011 12:39 AM #4
Ambassador
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Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

Love the "fat cat" photo. To me that says it all! 

May 25, 2011 04:01 AM #5
Rainmaker
1,503,919
Mike Cooper, GRI
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Absolutely, Debb. 

 

May 25, 2011 04:02 AM #6
Rainmaker
65,638
Cindy Logan
Mark 1 Real Estate Advisors - Huntington Beach, CA

Every time the government steps in, things get a little more complicated.  Like moving through a morass!  I agree with you, Mike!  one point of contact, who has to be an expert on everything sounds impossible.

I've heard a quote recently that I like:  If you want something done right, DON'T DO IT YOURSELF!

May 25, 2011 04:29 AM #7
Rainmaker
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Mike Cooper, GRI
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Cindy, I have to wonder where the lenders will find these "superhuman know everything" people because they haven't shown that ability so far.  Mercy!  How much complicated can it get?  I probably shouldn't ask that, should I?

May 25, 2011 06:03 AM #8
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