Letter to Mr. Alvaro G. de Molina, Chief Executive Officer GMAC

Letter

Letter to Mr. Alvaro G. de Molina, Chief Executive Officer GMAC

Cummings Asks Mortgage Companies to Act with 'Common Decency'

Congressman Elijah E. Cummings (D-Md.), a senior member of the House Committee on Oversight and Government Reform and a member of the Joint Economic Committee, sent letters to fourteen mortgage service companies in response to overwhelming complaints from constituents in Maryland's 7th Congressional District. Specifically, there have been a significant number of complaints regarding:

· Companies' refusal to accept partial mortgage payments while homeowners are behind in their mortgages and/or await a decision on a modification
· Unnecessary delays and poor communication during the modification process
· Disrespectful and unacceptable treatment of homeowners seeking a modification

Congressman Cummings urged the companies to support the goals of President Obama and the U.S. Congress to help American stay in their homes during these troubling economic times by treating these homeowners with common decency, and he requested that each company designate a specific employee to work directly with his Congressional staff to address the issues outlined in the letter.

A copy of one of the letters is below. The body text is the same for each institution receiving a copy.

Recipients:
Wells Fargo; Citi Mortgage; Wachovia Loan; American Home Mortgage; Indy Mac; Chase Home JP Morgan; GMAC; Northwest Savings Bank; Citi Financial Services; Aurora Services, A Lehman Brothers Company; Countrywide Mortgage; EverHome Mortgage Company; Eastern Bank; First Horizon Bank


Text of the Letter:
Mr. Alvaro G. de Molina
Chief Executive Officer
GMAC
3451 Hammond Avenue
Waterloo, IA 50702

Dear Mr. de Molina:

Through the efforts of President Barack Obama and the U.S. House of Representatives, the U.S. government has made clear its intent to provide relief for at-risk homeowners and protect the ability of responsible taxpayers to own a home.

In my district, there are many conscientious, hard-working people who are struggling to hold on to their homes. These are not speculators or investors, and the homes they are struggling to hold on to are not their second homes - and often the only home they have ever owned.

My staff has been working with constituents to help them navigate the steps to fend off default or foreclosure. However, in dealing with the mortgage servicers, the hurdles encountered by my constituents and staff are, in my opinion, both regrettable and avoidable.

First, when a homeowner is requesting a mortgage modification, we find that the process takes too long. Borrowers have been told that the modification process will take between 45 and 90 days to complete, due to the number of applicants. While waiting, borrowers often hear nothing from their servicer and sink further into debt. In cases in which foreclosure proceedings have been stayed to attempt a modification, due to the lack of communication, the foreclosure process may be even restarted before the borrower is notified of the outcome of the modification process. I urge you to ensure that there are policies in place to prevent unnecessary delay and ensure open communication with applicants.

Second, my staff and constituents tell me that a borrower who is behind in his or her mortgage may not be able to submit a partial payment while awaiting a decision on a modification. I find this absolutely unacceptable and cannot fathom why a servicer cannot accept a partial payment. In some cases a borrower may not have been able to make payments, but circumstances have changed for them and they are now trying to catch up. The decision to reject anything less than a full payment flies in the face of everything the President and Congress are working to achieve. As a result I am exploring legislation to address this issue.

Finally, I've been told that my constituents are frequently being treated like second class citizens. Communications with the mortgage personnel have been fraught with rudeness, disrespect, and callous insensitivity. Frequently, the borrowers cannot get a professional response without a call from my staff on the borrower's behalf. These are my constituents and your consumers - and they deserve better. It should not take a follow-up call from the office of a U.S. Congressman for a consumer to be treated like a human being. I hope you will take pains to address this issue.

The President has asked all of us - from Wall Street to community banks to individual Americans - to make sacrifices for the greater good of the country. The overall economic health of the nation depends on all of us making such an effort. Frankly, what I ask of you now is not sacrifice, rather just common decency. As I mentioned at the outset, Congress is committed to keeping Americans in their homes. I hope institutions like yours will work with us as we progress toward our goal.

I cannot understate the urgency in my request. My constituents are losing their homes to foreclosure on a daily basis. I ask that you designate a contact person with whom my staff can work to address these issues and have this individual contact Martin Levine in my office at (202) 225-4741 no later than Monday, April 13.

Sincerely,

Elijah E. Cummings
Member of Congress

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