Loan Servicing Racket Horror Stories Continue; Local Media Outlet Intervenes, Obtains Some Resolution w/ Tax Escrow, Forced Placed Insurance Problems

In Dallas, Texas, a recent story from KDFW-TV Channel 4 points to the problem of unregulated mortgage loan servicing companies by highlighting three stories involving homeowners driven into foreclosure, allegedly due to paperwork screw-ups by American Home Mortgage Servicing, Inc., the outfit handling their house payments.(1)

• [Beth] Shores says the trouble started last year. The company that manages their mortgage account sent a notice stating her mother was delinquent on her property taxes. But Shores’ mother, Helen Jordan had deferred her Dallas County property taxes, as Texas law allows for people over the age of 65. And she had written proof. But the mortgage servicer went ahead and paid the back taxes of $14,348.82 and demanded repayment. “There is no dealing with this company,” said shores. “I faxed. I called. I certified lettered. I did everything to everybody, including the tax office that this was deferred…including the original deferral affidavit and it was totally ignored.” Then the foreclosure letter arrived.

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• Charles Smith says he is irate and at his wits end. He says he has never missed a mortgage payment yet he fears he could also lose his home because of delinquent taxes. Even though Smith has written proof from the county tax office that his taxes have been paid in full, he says his mortgage servicer set up an escrow account to cover the taxes. Then, the company nearly doubled his monthly payment. But he kept making his regular monthly payments. "Now I am in default and now they can accelerate the loan and put me in foreclosure and put my house on the auction for sale,” Smith told FOX 4.

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• For the Christophers, of Port Arthur, Texas, it wasn’t their taxes, but their insurance. Even though they had a letter from Farmers [Insurance] stating their policy had never lapsed, AHSMI set up an escrow account, purchased a policy and then jacked up their payment. “I had just spoke to a supervisor telling me all this will be straightened out in 10 days and then the very next day is when we get the letter saying they were wanting to do the foreclosure,” Connie Christopher told FOX 4. Connie says she gets calls at work demanding payment. The Christophers say they can’t refinance because their credit is now a mess.

Reportedly, after being asked by FOX 4 for comment on these three stories, American Home Mortgage Servicing stated that it “resolved all open issues” with all the homeowners. Smith said his monthly mortgage payment has now been returned to the original amount, and Shores said her mother received a letter stating her tax issue has been cleared up, the story states. The Christophers, however, reportedly have a pending lawsuit against the loan servicer.

For the story, see Mortgage Servicing Companies Unregulated in Texas.

(1) See More and Better Predatory Loan Servicing Fraud for commentary on the loan servicing racket recently appearing in RisMedia.com. Among the "tricks" reportedly used by loan servicers when setting up borrowers for a screwing-over described in this story are:

• “We take so long to process our mail it could really cost you.”
• “We didn’t get your payment and you can’t prove we did.”
• “Please try our easy-pay program.”
• “You didn’t pay your property taxes, so we did.”
• “You do not have insurance.”
• “For your benefit, we’ve established an escrow account.”
• “We’re here to help in your time of need.”