After a year of fruitlessly asking Washington Mutual to lower her mortgage payments, Stacey Rustrum marched into a bank branch in Oakland, Calif., this week hoping that in-person help would accomplish what her hours of phoning had not.
"I saw this on the news this morning and came on down," she said. "They can't pretend I'm not here."
What she had heard about was a "homeownership center," a new concept designed to help struggling borrowers initiated by banking giant JPMorgan Chase, which now owns WaMu, as well as EMC, the former lending division of Bear Stearns.
The center, located in a bank basement, is staffed with counselors who meet one-on-one with customers at risk for foreclosure, collect their financial information, send it to bank number-crunchers and notify the customers within 30 days if they qualify for modifications to make their loans more affordable.
Chase is opening the centers in areas rife with delinquent mortgages. It plans to have two-dozen nationwide by April.
"To be able to know in 30 days is just fantastic," said Elaine Brooks-Cox, who works with hundreds of underwater homeowners as a counselor at Pacific Community Services in Pittsburg, Calif. More commonly, borrowers wait months to find out if they might qualify for help such as lowering their interest rate, extending their loan term or forgiving some principal.
That was Rustrum's experience. Her family's finances are tight because the economy has cut into her husband's income as an ironworker, and she had to give up her real estate job to care full time for their son Austin, 4 1/2, who has cerebral palsy, epilepsy, chronic lung disease, asthma and brain damage.
"I applied a year ago to WaMu," she said. "They asked for additional information, like pay stubs. I sent them four times. Then they declined me because they said I didn't have enough income to pay my mortgage" -- even though she was current on her payments at the time.
Now the family is three months behind, largely because of buying a van to transport Austin and his wheelchair. They are hoping to shave $400 off their $2,250 payment and get a fixed-rated loan instead of their current interest-only loan, which is scheduled to adjust higher in five years.
"That $400 would make our other bills more affordable," Rustrum said. "We can't downsize Austin's medications or hospital visits."
President Obama's housing rescue plan offers cash incentives to banks that modify loans, but a lot hinges on which costs the bank more: a foreclosure or a loan modification. Chase doesn't reveal how it performs that calculation, called "net present value." Several counselors from nonprofit housing agencies said they wish the formula were more transparent.
Chase said it has done loan modifications for 330,000 customers since 2007. It declined to say how many of those loans stayed current. Several reports have shown that many people with modified loans end up delinquent within a few months.
"We've improved re-default by getting to customers early and verifying their income," said Gary Kishner, a Chase spokesman.
The bank said the regional homeownership centers will be the cornerstone of its effort to help 400,000 customers with $70 billion in loans over the next two years.
"The customer will have a point of contact, someone who heard their situation," said Cynthia Thompson, Chase western regional manager for the homeownership centers. "They won't have to tell their story again and again."
E-mail Carolyn Said at csaid(at)sfchronicle.com. For more stories visit scrippnews.com
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