Wall Street Journal On Investigations Of Possible Phony Claims By Mortgage Servicers & Lenders In Homeowners' Bankruptcy Cases

The Wall Street Journal is the latest to chime in on reports that mortgage servicing companies and lenders, when claiming amounts owed from homeowners in bankruptcy, are submitting inflated amounts to the bankruptcy court, and are allegedly engaging in questionable practices in the handling of homeowners' mortgage payments. The Journal reports:

• Attorneys from the U.S. Trustee Program, a division of the Justice Deparment, have taken aim at mortgage lenders, servicers and their lawyers in at least six states, including Georgia, Massachusetts and Pennsylvania, since last year, according to court records. The agency is probing representations made to courts about what homeowners owe and the handling of their payments during bankruptcy, both areas in which consumer advocates say there are pervasive problems.

(Editor's note: While the concerns being expressed lately relates to servicers' and lenders' claims and conduct occurring in the context of homeowners' bankruptcy cases, equal concern should also be directed to similar claims and conduct when servicers and lenders file non-bankruptcy, foreclosure lawsuits against homeowners, which are currently flooding the court system.)

For more, see U.S. Expands Scrutiny of Home Lenders (subscription required; if no subscription, try here - then click link for the article).

Go here, Go here and Go here for more on recent Countrywide problems with consumers.

For more on allegedly false claims being made by home lenders and mortgage servicing companies both in bankruptcy and non-bankruptcy proceedings, see:

• Foreclosure Charges by Lender Investigated (New York Times - 11-28-07) (may require subscription; if no subscription, try here).
• Borrowers Face Dubious Charges in Foreclosures (New York Times - 11-6-07) (may require subscription; if no subscription, try here),
• Bankruptcy Trustees Taking Action Against Dishonest Lenders, (Warren Reports On The Middle Class),
• Countrywide Subpoenaed; Possible False Foreclosure Claims Against Homeowners Being Investigated,
• Homeowners In Foreclosure Being Clipped For Illegally Inflated Legal & Appraisal Fees, Says Lawsuit,
• Fairbanks Capital Screwing Mortgage Lender Too, Says Lawsuit,
• Class action lawsuit - Trevino vs. Mortgage Electronic Registration Systems (aka "MERS"),
• Lawsuit - Ellington Credit Fund, Ltd. vs. Select Portfolio, Inc., et al., available online courtesy of Michael Dillon and GetDShirtz.com.