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MSFraud.org: Mortgage Servicing Fraud Resource Site for Homeowners

16 Oct

This is an excellent site and it has so much information for homeowners being overwhelmed by loan servicers who are stealing homes and taking advantage through foreced place insurance, late payments and etc.

If you are in distress over your home, THIS SITE SHOULD BE AT THE TOP OF YOUR LIST.

Here is a short excerpt from their “HOw They Steal Your Home page:

They are experts with millions of successful cases behind them.  The loan servicing industry, including those who founded and are running the servicing scam companies, helped craft the “standard” loan documents in widespread use. They are written entirely for the protection of the lending industry, not the consumer. That situation allows them to manipulate their processes and procedures to push you into a position where they can take funds from you or ultimately take your home, often within the terms and conditions of the loan. Some do go beyond the terms or even break the law and aren’t stopped because the borrower does not actually understand the agreement they signed or the laws and regulations.

The path toward losing your home to this scam is actually quite simple. The first phase is designed to fabricate the default, and typically begins with one, or a combination of ways to arm the servicer’s records with false data:

When the servicer decides to manipulate the date the payment is received in order to artificially

create a late payment.

When the servicer applies part of the payment to something other than principal and interest and creates a partial late payment or deficiency.

When the servicer decides to “force place” an insurance policy on the property by claiming the
homeowner has not provided proof of insurance.

When the servicer pays your property taxes late, then adds their late penalty to your account
without your knowledge.

Any or all of those processes result in at least one month of the account being past due and a negative note is made in the credit report (which effectively prevents the borrower from refinancing). It also helps the Private Mortgage Insurance carrier keep the policy in effect on the loan, which is why these insurance companies have investments in servicing companies in the first place – a late payment or two allows the lender to keep the insurance in force.

If the borrower has anything more than about 10-15% equity in the property, it is to the servicer’s advantage at this point to not aggressively attempt to collect. In fact, if the borrower makes contact, the servicer will engage in delay tactics to avoid resolving the problem in time to prevent default. If the equity position is considerably less than 10%, the servicer does not have as much leverage, nor is the opportunity as great and they will typically be more aggressive in collection efforts and more willing to keep the loan in force.

In the case of force-placed insurance, it is to the servicer’s advantage to ignore the borrower and any proof of insurance as long as possible, again to keep the borrower’s credit status in a negative light and to maintain their relationship with the insurer they contract with. These policies are extremely profitable because they provide absolutely no coverage for the homeowner. They protect ONLY the value of the loan if the property is destroyed.

If the servicer has analyzed the opportunity and marked the property for default and recovery, the next payment received will be rejected as being insufficient. If it is accepted, the application of the funds leaves the loan sixty days past due. Typically, the scam now moves toward formal legal notice of acceleration in order to coerce the borrower into signing a highly-profitable forbearance agreement to somehow “save the home.” The servicer rolls thousands of dollars in penalties and an incomprehensible combination of legitimate and illegitimate fees into the agreement and the homeowner is left with no choice but to sign it or lose their home. The amount demanded will be calculated to take as much of the homeowner’s equity as possible.

If the homeowner decides to sell the property to get out of the situation and take their equity, they will find the payoff amount (which in the last month of the scam will take longer to get than the amount of time left before foreclosure) strips them of their equity. That combined with their artificially-damaged credit rating helps keep the victim trapped.

If the borrower cannot pay the amounts demanded in the forbearance agreement, the servicer will have one of their network of specialized attorney firms foreclose and the property will be sold, typically at a county auction or through their real-estate network.

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