"Obama mortgage plan needs work" proclaimed the title of another article on CNN Money the next day. Apparently, many borrowers were asking, "Mr. President, help us get one of your mortgage workouts now." Nearly five months after President Obama unveiled his housing rescue plan it was still beset with problems, said borrowers, housing counselors and even the president himself: "Loan servicers are overwhelmed by the numbers of homeowners applying for loan modifications or refinancing. Borrowers are frustrated that their paperwork is being lost, and calls are not returned. Administration officials are racing to roll out new features to improve the program."
Fast forward to August and things appear to only be getting even worse. The largest non-bank mortgage player and the third largest originator of Federal Housing Administration(FHA) loans in June, Taylor Bean & Whittaker was shut down quickly following the August 4th raid of their Florida headquarters by federal agents. The special inspector general for the Troubled Asset Relief Program (TARP) said its agents had executed search warrants in conjunction with the Federal Bureau of Investigation (FBI) and the inspector general for the Department of Housing and Urban Development (HUD).
At that time Ginnie Mae President Joseph Murin said, "I would like to reassure TBW's customers whose loans serve as collateral for Ginnie Mae securities that, although this action will result in a new servicer, the transition will be seamless for them." I hope it really was seamless for Ginnie Mae backed mortgagees, but as my own experience shows, it has been anything but that for some of us.
My mortgage loan was serviced by Taylor Bean & Whittaker. In late July, in an effort to pay down my mortgage, I sent TB&W a regular check, which they rejected, for its amount exceeding their maximum. At the time, a TB&W customer service supervisor assured me that there was still plenty of time for me to send them a cashier’s check, which they would receive and credit to my account by August 15th. According to her, this would result in an identical amortization schedule adjustment.
Unaware of the raid or the pending change in my mortgage processor, I mailed a replacement cashier's check to TB&W on August 8th. Yesterday, I received a welcome letter dated August 18th from my new mortgage processor, Cenlar in Minnesota, informing me that my Freddie Mac mortgage loan, previously serviced by Taylor Bean and Whittaker, was transferred to Cenlar for servicing, effective August 12, 2009. The letter included new instructions for making loan payments, said that TB&W stopped accepting payments on August 11, 2009 and showed a due date for the next payment as August 1, 2009!
I created an account on Cenlar's website and sure enough, that cashier's check has still not been applied to my mortgage. Needless to say, the old TB&W phone number has been greeting callers with a busy signal (or dropping calls while on hold) for weeks now. So, I called Cenlar to find out what happened. Instead of the answer, I heard, "Due to unforeseen circumstances we are not able to service your call.”
I placed a call to Freddie Mac - they have a special set up to deal with former TB&W customers – 800-373-3343 (press 3 in response to each of the automated messages - three times in all). The lady I spoke to verified that my loan was a Freddie Mac and said that Cenlar will be able to answer my questions as soon as they start picking up their phones… soon. (Very useful - NOT!) She had no further information and was unable to tell me when "soon" may happen. I placed more calls: to Senator Michael Bennet, to the Department of the Treasury, to the FBI and even the White House. The furthest I got, of course, was talking to volunteers and receptionists...
Most mortgage loans specify the first of the month due date, but allow an interest free 15 day grace period. I am sure that most people take advantage of this "free ride" and make their payments in the first two weeks of the month. Thus, the Government’s timing in raiding and forcing a closing of Taylor Bean in the first two weeks of the month and without prior notice to TB&W’s paying customers potentially caused more problems than it solved. And what about all of those who were only days away from closing their loans with TB&W? What are they suppose to do now? Just another stupid action by government bureaucrats - so much for "seamless," so much for helping "ordinary people!"