Tuesday, November 2, 2010

Mortgage Servicing Fraud - Why does no one know about this?

In the past week my eyes have been opened to a disturbing phenomena in the world of home ownership. Beyond that, I now have first hand knowledge of just how quickly a situation can become devastating to an individual family struggling to make ends meet.

I am talking about the reality of Mortgage Servicing Fraud.

Never heard of it? Don’t feel bad. I hadn’t either. And it wasn’t until I spent several hours on the Internet trying to understand our current situation (and it’s legality) that I finally found the term that accurately described what we were going through.

It all started two months ago when I called to make our mortgage payment. Tired of paying an extra $20+ per month to pay by phone, I inquired if there were other ways to pay that did not incur an extra fee. The only option I was given was to mail in my payment. In fact, I was encouraged to do so as this was apparently their “preferred” payment method. At this time I also set up a payment expectation that my next payment would be slightly late, with a double payment being made in October. (3 payments, 2 months.)

I mailed off my payment in September, left for the better part of October to work out of town, and called as soon as I returned to make the double payment that I had promised for the month. Well imagine my surprise when I learned that my home is now in active foreclosure and that my account has been referred to their attorneys for further action.


In essence because I mailed in my payment. Apparently, when a late payment is sent through the mail the servicer can choose not to accept it. What I have learned is that once your payment is late, it can be considered to be a “partial payment.” A mortgage servicer then has the option of refusing partial payments if they feel that no payment arrangement has been made. A payment that is called in can constitute a payment arrangement; one that is mailed in does not.

In short, my mortgage servicing company rejected my payment, and they did so without my knowledge. I did not receive my check back, I was not informed of their decision by certified letter or any other form of contact and I was completely blindsided by this new reality. A reality that was created by their actions and by their unwillingness to provide me with the information that I needed to make informed decisions about my account and my payment methods.

Now my husband and I are stuck in a situation of trying to pay our mortgage. (We have the money!) But no one is willing to accept payment. The mortgage company points at the attorney while the attorney points at the mortgage company. In the mean time our account remains unpaid and they are moving forward with the foreclosure process. It is like being caught in a real life game of cat and mouse where we are the only ones that can lose.

My question is, how can we be in default when we are willing, and even trying, to pay our debt, but no one is willing to accept the funds? More so, how can we be in default as it was their actions, not ours, that created the situation in the first place?

This reality is what led my search to define the situation and discern its legality.

This situation is what led me to the idea of Mortgage Servicing Fraud.

Your “Mortgage Servicing Company” is, in essence, the middleman between you and the company that holds the note on your mortgage.

Mortgage Servicing Fraud refers to fraudulent behavior on the part of the Mortgage Servicer that is detrimental to the individual homeowner. It can appear in several forms. Such as a forced insurance policy when proof of insurance has been supplied. An insurance policy that is placed without the homeowner’s knowledge. Then, when the policy goes unpaid the home goes into foreclosure.

Or perhaps the servicing company chooses to pay the homeowner’s property taxes late. Then they charge the late fees to the account, forcing it into delinquency and eventually into foreclosure. Again, this is all done without the knowledge of the homeowner.

Or maybe they do something exactly like they have done to me and to my family.

Many of these cases go all the way to the courthouse steps with the homeowner genuinely believing that it is all a simple miscommunication that can easily be rectified.

It may sound farfetched, but the practice of forcing paying customers into foreclosure is alarmingly common.


Because this is how the servicing companies make the their money and this is how they generate profit.

To understand this, you must first understand that servicers generate income in 3 ways.

  • · They receive a fixed fee based on loan value.
  • · They “float” income from the time a homeowner pays until those funds are dispersed to the holder of the note, various insurance policies or tax bills.
  • · They retain most or even all fees related or incurred for late payment.

Looking at these facts it quickly becomes apparent that servicers have no incentive to keep homeowners in their homes. In fact, according to Katherine Porter, an attorney specializing in this field and who has been called to testify, “Servicers have incentives to make it difficult for consumers to cure defaults, rather than engage in loss mitigation.” The longer a customer is in default, the more money their account generates for the servicers and the larger their profit margin. In other words, offering poor customer service can serve to maximize servicer profits.

In my particular case, the Mortgage Servicing Company has an added incentive to act immediately rather than allow me to reinstate my loan into good standing. Their incentive? The PMI insurance on my loan will drop off in the very near future. Meaning that if they are able to force a foreclosure now, then they receive not only the 10’s of thousands of dollars that my husband and I have paid, but also the full value of the loan from the insurance company as well as the ability to buy back the home from the insurer and resell at full market value. In essence, foreclosing now allows them to recoup 3 times the value of my loan. An opportunity they will lose as soon as my mortgage balance reaches the threshold for removing PMI coverage.

Yes, they do have laws that they should and are required to abide by. But the penalty for disobeying those laws is negligible. No more than a slap on the wrist, and it does not end or prevent foreclosure proceedings. Even in a bankruptcy situation.

This means that they can act with practically limitless impunity as the burden of proof is on the homeowner and even when proof is obtained, the outcome is still foreclosure. Therefore, the laws go ignored in many, if not most, cases.

I ask again, how can this situation be legal? It is in direct violation of the concept of a free market society as there is no accountability and no reliable system of checks and balances in place.

The more I research, the more that I find that these types of behaviors are at the heart of the majority of foreclosures taking place in this country today. In fact, the mode, or most common, statistic that I can find points to Mortgage Servicer Fraud playing a role in roughly 70% of foreclosures related to the current housing crisis.

70%! That translates to over 1.2 million American homes in this century alone.

If this number is real, and I believe that it is, then why are we not hearing about it?

THIS is the issue at the heart of the current real estate crisis and THIS is the issue that homeowners need to hear about. The American people need to know that these behaviors are out there and learn ways to combat them BEFORE their home sits on the auction block.

In fact it is Mortgage Servicing Fraud that sits at the heart of the current moratorium on foreclosures in California. It is also Mortgage Servicing Fraud that sits at the heart of the recommendation of a national moratorium by the Leadership Conference on Civil & Human Rights, the National Fair Housing Alliance, the National Council of La Raza and the Center for Responsible Lending.

It is the issue at the heart of the problem, and it is the issue that no one is talking about.

It is time for the American people to band together and fight this injustice as one. Owning your own home is the ultimate symbol of the American Dream. For many it is our true sign of financial security and our one true foothold into the middle class. It is also the one true asset that allows many of us to leave behind a legacy of growth to our children rather than a legacy of debt.

The reality of Mortgage Servicing Fraud is that it is threatening that dream and it is doing so in an illegal and unjust way. It is an issue that crosses party lines, crosses demographic lines and unites us as one people with one goal. By forcing it into the forefront of the mainstream media we might finally force the relevant governing bodies to take action and hold these companies accountable for their decisions and behavior.

We are not asking for radical change. We are simply asking for these organizations to be held to the same standards as the individuals upon which they enforce their will.

For those of you who want to learn more, here are a few links you might want to check out. I promise, it will be eye opening!

· http://judiciary.senate.gov/pdf/08-05-06Porter_Testimony.pdf

· http://www.foreclosurefish.com/blog/index.php?id=338

· http://www.givemebackmycredit.com/blog/2009/09/mortgage-servicing-fraud-what.html

· http://www.bloomberg.com/news/2010-11-02/mortgage-modifications-meant-to-save-u-s-homes-push-them-into-foreclosure.html

Saturday, October 30, 2010

Cricut Circle Challenge Entry!

I am so excited that I actually got this done on time! Being in Gatlinburg for the first three weeks of them month didn't give me much time!

I created this project using the Home Decor and Songbird cartridges. The paper is from SEI Jocelyn collection with glitter paper from DCWV.

Hope you like it!

Saturday, October 2, 2010

Catching Up

This weekend I have spent some time thinking about all of the things that I "have" to do. I have to hit my deadlines, I have to make product, I have to clean the house, I have to mail out bills, I have to feed my child.....the list can get overwhelming.

But last night, my husband took me out. We ate some yummy Sushi, we took our beautiful daughter to an outdoor music festival, we took a carriage ride around downtown. Basically we slowed things down a bit and just enjoyed life.

It was one of the most amazing evening that I can remember. It also made me remember something. There will always be a huge list of "have to's" in life, but we do these things, and we work hard in order to enjoy those precious moments that happen when we least expect them.

A big thank you to my wonderful husband for reminding me why I work so hard. I love you!

Sunday, May 17, 2009

Ice Breaker

So....It's been awhile.  A long while actually, and it is time for me to step back into the ring.  I have plenty of excuses, that I am busy, that the baby hates the computer, the I have discovered and become addicted to FB, but none of those really matter in the least.  Therefore, I am making it my pledge to do better.  Much better.  And I promise that I will start doing just that....tomorrow.

Monday, September 22, 2008

Fresh Water Friends!

So I finally got around to putting all the pictures from this summer on to my computer.  Meaning that now I get to share all the fun with you!  See, I promised you that we had all kinds of fun, I'm just all kinds of slow when it comes to sharing!

I decided to start with what I think of as one of this summer's highest points.  My DH and I were lucky enough to get two of our nieces for two weeks this summer.  We had SO much fun with them and were sad to see them go.  But while they were here we did sneak in a few fun days!  One of which was spent at the Chattanooga Aquariums.  

The girls all had a blast, (little and big!) and we got some great shots!  Take a look!

This is the pool where you can pet the sting rays.  My DD thought it was awesome, but she kept trying to lick her hands so we had to end up just letting her look.  I think that she would have happily climbed right in if we would have let her!

In the butterfly garden M and T kept catching these beautiful butterflies.  DH wanted to hold one so bad, but we didn't think that that would end well for the butterfly.  So T held it and Daddy held CJ's hand to let her feel the wings.

The girls took the baby down this tunnel so she could see the tanks from the inside.  I don't know what was funnier, the way they looked inside, or watching my 15 year old niece try to crawl through the tunnel!

Little bit LOVED the fish.  And she loved even more that her cousins would patiently take her anywhere she wanted to go.  As you can see here, she was totally inthralled!  I miss my helpers!

My nature loving niece showing her animal skills once again.  I swear this child was born to be a vet!

This one wasn't from the aquarium, but I thought it was too cute not to post.  They made a fort and all crawled through it.  So sweet!

Oldest niece showing her bug catching skills.  I'm going to make a southern girl out of her yet!

Mommy with her sweet baby!  She is getting so big, but I love how happy she looks here!  This is why we bought season passes to the aquarium!

This was taken is the fountains outside of the aquarium.  Since we didn't let my DH play in the water inside of the aquarium we let her play in the water outside.  She loved it!  She ended up in her diaper and nothing else and soaking wet!  She also got her daddy wet and I can't tell you how much he loved it.  I don't know why but he thinks its sweet when she gets him wet.

This is how much she loved it!  So cute.

More later!

Saturday, September 20, 2008

Happy Birthday Sweet Girl!

So it's official.  My sweet baby girl turned one yesterday and it was a very bitter sweet day for me all the way around.  While I have loved every moment of this year and wouldn't change any of it for the world, I also feel like it has gone too quickly!  As I was looking back through pictures to do this post I started to tear up a little looking at a time that I will never have again. 

Already she can do so many things that I'm just not ready for, it lets me know that I better not blink or she'll be ready for college!  Well, I promise I'll do a fun post after we have her real party on the 4th.  But for now all I can say is Happy Birthday Baby!  Mommy loves you!

Oh, and how do you all get the pictures to turn the way you want them to?  Mine go all whonky when I try to post them! 

Monday, August 25, 2008

The Babies and The Beach

Okay, I know I'm behind.  Well, to be honest I'm a bit more than behind, but I have an excuse.  It's not a good excuse, but an excuse none the less, and 
that it that its summer.  And this particular summer has been pretty full of all of these amazing things that I don't have pictures of yet.  

I mean, I have the pictures, I just don't have them off of my camera.  But one
 thing that I do have pics of is our recent family vacay to the beach.  Me, DD, and DH all went to the beach with the in-laws.  This was my first trip with them and it was an eye opening opportunity to say the least.  

On a side note, this is my brother in law and one of the triplets.  KG was a cheerleader for UT back in the day, and he is teaching all the kids to stunt.  Caia just kind of sat on his head .  We'll have to work with her on that!

 But, back to Vacay!  For starters we has 6 little girls all in one condo unit.  1 six year old, 2 year old triplets, 1 16 month old, and my sweet baby at 10 months.  If you check out the pic to the left here you can get a good idea of how it looked for the most part.  I especially love all their little matching outfits in this pic.  

The kids were all so sweet and it was fun to watch them play together in the sun and sand.  Caia loved the pool and she would happily play in it for as long as her dad and I would stay in with her.  She was so sweet!  She also decided to make the trip special by taking her first steps.  Now she is running around every where and daring all of us to keep up.

I'm going to wrap it up now because I have managed to delete my pictures three times and have no idea how they are all going to show up on the page.  I don't know how you guys make it look so good!