Questionable Mortgage Servicing Practices Coming To Light In Bankruptcy Cases

The New York Times reports:

• As record numbers of homeowners default on their mortgages, questionable practices among lenders are coming to light in bankruptcy courts, leading some legal specialists to contend that companies instigating foreclosures may be taking advantage of imperiled borrowers. Because there is little oversight of foreclosure practices and the fees that are charged, bankruptcy specialists fear that some consumers may be losing their homes unnecessarily or that mortgage servicers, who collect loan payments, are profiting from foreclosures.

• Bankruptcy specialists say lenders and loan servicers often do not comply with even the most basic legal requirements, like correctly computing the amount a borrower owes on a foreclosed loan or providing proof of holding the mortgage note in question.

• “Regulators need to look beyond their current, myopic focus on loan origination and consider how servicers’ calculation and collection practices leave families vulnerable to foreclosure,” said Katherine M. Porter, associate professor of law at the University of Iowa.

[...]

• Questionable practices by loan servicers appear to be enough of a problem that the Office of the United States Trustee, a division of the Justice Department that monitors the bankruptcy system, is getting involved. Last month, It announced plans to move against mortgage servicing companies that file false or inaccurate claims, assess unreasonable fees or fail to account properly for loan payments after a bankruptcy has been discharged.

[...]

• [O. Max Gardner III, a Shelby, N.C., consumer bankruptcy attorney said,] “Somebody files a Chapter 13 bankruptcy, they make all their payments, get their discharge and then three months later, they get a statement from their servicer for $7,000 in fees and charges incurred in bankruptcy but that were never applied for in court and never approved.”

Included among the examples of questionable practices by mortgage servivcing companies is a reference to a class action lawsuit filed against Mortgage Electronic Registration Systems (aka "MERS"), a home loan registration system which oversees more than 20 million mortgage loans and is reportedly owned by Fannie Mae, Countrywide Financial and other large lenders. MERS is accused of overcharging borrowers for legal services in foreclosures. According to Jeffrey M. Norton, a lawyer who represents the plaintiffs, it pays its foreclosure attorneys a flat fee of $400 or $500 but charges the borrowers three or four times that amount. The plaintiff's mortgage loan is reportedly owned by Washington Mutual, and went into foreclosure in 2006.

For more, see Borrowers Face Dubious Charges in Foreclosures (if link expired, try here).

For another lawsuit accusing a mortgage servicing company of questionable practices, see Ellington Credit Fund, Ltd. vs. Select Portfolio, Inc., et al. (Plaintiff's First Amended Complaint - 19 counts - 52 pages, 2.35 MB approx.) - available online courtesy of Michael Dillon and GetDShirtz.com.

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Race Discrimination, Civil Rights Violations Alleged In Predatory Mortgage Servicing Lawsuit - Class Action Status Sought

A lawsuit filed in a New Haven, Connecticut Federal Court last week alleges that Wall Street investment banking firm Bear Stearns and its EMC Mortgage servicing unit engaged in:

• "[r]acially discriminatory practices ... in servicing near-prime and sub-prime residential home loans" and claims that "EMC and Bear Stearns intentionally sought out non-prime loans, predominanly made to Hispanics and African Americans, in order to reap profits from their predatory servicing practices."

The predatory servicing practices complained of in the suit include:

• "[t]he imposition of unwarranted fees and costs, the pyramiding of late fees, the unjustifiable force-placing of insurance, the failure to properly credit payments, the unwarranted reporting of derogatory information regarding borrowers to credit reporting agencies, and the failure to properly administer escrow accounts."

Representing the homeowners are the firms Butler Norris & Gold, Hartford, Connecticut, and James, Hoyer, Newcomer & Smiljanich PA., Tampa, Florida.

To view the lawsuit:

• go to this direct link for Rodriguez v. Bear Stearns on the PACER system (PACER registration required - 31 pages - $2.40); or


• drop me a line at HomeEquityTheft@yahoo.com (put "Rodriguez v. Bear Stearns" in the subject line) and I'll e-mail it to you.

See also, Bear Stearns Mortgage Unit Accused of Predatory Loan Servicing (Bloomberg News).
.
Go here and go here for other posts on alleged race bias in real estate transactions.

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Do Big Banks, Mortgage Companies & Loan Servicers Really Lose Big When Subprime Mortgages Are Foreclosed?

According to this blurb in a recent New York Times story, the answer is probably not as bad as they would like everyone to believe:

• But on the billions of dollars worth of mortgage loans that have been sold to investors [through investment trusts owning pools of residential mortgages] in the last few years, it is not the banks or lenders like Countrywide that are hit with big losses when homes go into foreclosure. It is the sea of faceless investors who own pieces of these trusts. Also, under the trusts’ pooling and servicing agreements, Countrywide and other servicers typically recoup any costs they cover in the foreclosure process, such as legal and appraisal fees.

The real losers appear to be those who invested money (insurance companies, mutual funds, municipal & corporate pension funds, private individuals, etc.) in what Wall Street refers to as Residential Mortgage Backed Securities.

For more, including a story on the problems financially strapped homeowners are reportedly facing when trying to work out their troubled mortgages with large mortgage servicing companies like Countrywide Financial Corporation, see Can These Mortgages Be Saved? (if link expired, try here).

See also, Bay Area Complaints Pile Up Against Countrywide. (CBS 5 - San Francisco)

-----------------------

There is currently a lawsuit against a mortgage servicing company containing allegations which, if true, provides support for the proposition that homeowners aren't the only ones that have cause for concern about allegedly unfair or predatory treatment from mortgage servicers. Mortgage holders such as banks, trusts that own pools of mortgages, investors who own Residential Mortgage Backed Securities (RMBS), and others owning direct or indirect interests in residential mortgages that are serviced by mortgage servicing companies may also have reason for concern about possible unfair practices.

The allegations, if true, go a long way towards explaining why it seems like mortgage servicing companies actually seem to want to drive homeowners into foreclosure.

For a copy of the lawsuit, see Ellington Credit Fund, Ltd. vs. Select Portfolio, Inc., et al. (Plaintiff's First Amended Complaint - 19 counts - 52 pages, 2.35 MB approx.) - available online courtesy of Michael Dillon and GetDShirtz.com.

For a prior post that highlights a couple of the allegations in this lawsuit, see Fairbanks Capital Screwing Mortgage Lender Too, Says Lawsuit.

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ABC News' Nightline On Alleged Mortgage Servicing Company Ripoffs

Last Friday night, ABC's Nightline ran a piece on the mortgage servicing industry and the problems some servicing companies have been accused of causing to homeowners in connection with servicing their home mortgages. Featured in the story were:

• New Hampshire homeowner Mike Dillon and the ongoing problem he's had with a mortgage company formerly known as Faorbanks Capital Corporation (now known as Select Portfolio Servicing) that serviced his home loan;

• North Carolina consumer bankruptcy attorney Max Gardner who asserts that it is not uncommon that his clients' cases involve charges tacked on by servicing companies that shouldn't have been charged (in addition to practicing law, he runs Max Gardner's Bankruptcy Boot Camp where, according to his website, trains other attorneys to use every available consumer protection statute in his system including the FDCPA, TILA, UDAP, FCRA, ECOA, the automatic stay and the discharge injunction when representing individual consumers);

• Professor Katherine M. Porter of the University of Iowa College of Law, who discusses some of her findings which have been recently published in a research paper, Misbehavior and Mistake in Bankruptcy Mortgage Claims, in which she examined mortgage servicing companies' frequent non-compliance with law in consumer bankruptcy cases.

To read the online transcript of the ABC Nightline program, see 'Playing the Odds' (Lawyer Max Gardner Says Some Mortgage Servicers May Be Taking Homeowners for a Ride).

The link to the video of the program will be posted when it becomes available.

For more on:

• Mike Dillon and his experiences with his mortgage servicing company, visit his website, www.getdshirtz.com,
• Max Gardner's Bankruptcy Boot Camp, read the BusinessWeek article, Bankruptcy Boot Camp (How one man is training an army of lawyers to fight predatory lenders) (BusinessWeek - January 15, 2007),
• Katherine Porter's research paper, see Misbehavior and Mistake in Bankruptcy Mortgage Claims, then follow downloading instructions.

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Go here for more posts on homeowners and their attorneys who are using Federal & state consumer protection statutes, including the Federal TILA to try and undo the bad loans. undo mortgage loans TILA alpha questionable mortgage servicing practices tactics yak

Countrywide Subpoenaed; Possible False Foreclosure Claims Against Homeowners Being Investigated

Buried in an article in today's South Florida Sun-Sentinel is the following blurb:

• The U.S. Trustee, the federal agency monitoring the bankruptcy courts, has subpoenaed Countrywide Financial, the nation's largest mortgage lender and loan servicer, to determine whether the company's conduct in two foreclosures in South Florida represented abuses of the bankruptcy system.

• One of the inquiries involves Manuel Del Castillo and Maria E. Pena, Miami borrowers who filed for protection last May under Chapter 13 of the bankruptcy code. In July, Countrywide Home Loans filed a claim, saying that the borrowers owed almost $279,000. In the second case, the trustee has asked for documents relating to Countrywide's claim for almost $101,000 against William and Joyce Chadwick, borrowers in Boca Raton, who filed for Chapter 13 protection in October 2005. The borrowers in both cases objected to Countrywide's claims of what was owed.

Source: Business Briefing (4th thru 6th paragraph) (11-28-07).

See also, Foreclosure Charges by Lender Investigated (New York Times - 11-28-07) (may require subscription; if no subscription, try here).

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:

• Borrowers Face Dubious Charges in Foreclosures (New York Times; may require subscription; if no subscription, try here),
• Bankruptcy Trustees Taking Action Against Dishonest Lenders, (Warren Reports On The Middle Class),
• Questionable Mortgage Servicing Practices Coming To Light In Bankruptcy Cases (11-6-07 post).

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Class Action Suit Alleges Conspiracy To Squeeze Bankrupt Homeowners In Foreclosure; Fidelity An Alleged "Secret Puppetmaster" Of Creditors' Lawyers

In Houston, Texas, The Associated Press reports:

• Homeowners have sued Fidelity National Information Services Inc., a giant financial data-processing company, accusing it of raising the price that cash-strapped consumers must pay to avoid foreclosure of their homes. The lawsuit, filed Jan. 16 in the U.S. Bankruptcy Court in Houston, contends that Fidelity has conspired with mortgage-servicing companies and law firms to "add to the indebtedness" of homeowners by tacking on secret fees that remain undisclosed for years.

• "The fees the Fidelity-controlled law firms charge in Chapter 13 bankruptcies are inflated by 25 percent to 50 percent," the lawsuit asserts. The law firms, it says, then "kick back" the extra amount to Fidelity under a formal agreement under which the law firms' fees are set. "Fidelity keeps its role, as well as the kickback, hidden from the courts as a matter of systematic policy."

***

• Fidelity counts Washington Mutual and Bank of America among the biggest clients of its default-management services. The company says it handles default mortgage servicing for 22 of the top 25 residential mortgage servicers, and 13 of the top 25 subprime servicers.

For more, see Suit claims Fidelity abuses homeowners.

Editor's Note:

The lawsuit also describes Fidelity's alleged role as follows (page 5, paragraph 21 of lawsuit):

• [F]idelity’s “comprehensive” role is really that of secret puppetmaster of the law firms that appear in [the Houston Bankruptcy] Court on behalf of mortgage servicing lenders. These law firms (in the Harrises’ case, Mann & Stevens, P.C.) collect their fees by tendering their bills through Fidelity and then on to the mortgage servicer – in this case Saxon, which then charge debtors, like the Harrises, without ever obtaining this Court’s
  approval.

To view the entire lawsuit, see Harris vs. Fidelity National Information Services Inc.

Go here to download Misbehavior and Mistake in Bankruptcy Mortgage Claims, a recent report on the conduct of some lenders in court proceedings when homeowners file for bankruptcy protection (by Katherine M. Porter University of Iowa - College of Law).

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A Perspective On The Mortgage Loan Servicing Business

A blogger on the Finance Blog at Conde Nast Portfolio.com offers this perspective on the mortgage servicing business:

• If you simply have a lender and a borrower, then often the servicing arm of the lender can be incredibly valuable to both sides: a good loan servicer will find a way to keep the borrower in their house, and maximize the value of the loan for the lender, which otherwise might have to write it off or go through a painful, expensive, and protracted foreclosure process.

• What happens, however, when the servicer is a for-profit entity not connected with the lender? Suddenly, there's a conflict between saving money for the lender, on the one hand, and making money for itself, on the other. A simple mortgage renegotiation is not very lucrative for a servicer; a fully-blown foreclosure, on the other hand, provides much more in the way of opportunities to profit.

(If true, this adds support to the proposition that a for-profit mortgage servicing company with no connection with the institutions and trusts that actually own the homeowners' mortgages, would be financially better off driving a homeowner into foreclosure than trying to arrange a loan modification or some other type of mortgage payment workout.)

For more, see Worrying About Mortgage Servicers' Fate.

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Mass AG Sues Fremont Alleging Unfair/Deceptive Lending & Loan Servicing Practices

(original post - 10-6-07)
From the Office of the Massachusetts Attorney General:

• Today [Friday], Attorney General Martha Coakley filed a lawsuit in Suffolk Superior Court against California-based Fremont General and Fremont Investment and Loan (“Fremont”), a subprime lender that originated thousands of loans in Massachusetts. The complaint alleges that Fremont engaged in unfair and deceptive conduct on a broad scale in connection with selling mortgage loans to Massachusetts consumers...

• The Attorney General’s Office is seeking civil penalties, restitution and an injunction, which would prohibit Fremont from selling or transferring any Massachusetts mortgages and from foreclosing on any Massachusetts loan without giving the Attorney General’s Office a 90-day opportunity to review the loan transaction and object to the foreclosure.

The lawsuit alleges unfair and deceptive conduct in connection with both the origination of mortgage loans, and the subsequent servicing of those loans. For more, see Attorney General Martha Coakley Files Lawsuit Against National Mortgage Lender - Fremont Investment And Loan (First Case Under 2004 Predatory Home Practices Act).

See also:

• Mass. AG sues subprime lender (The Boston Globe),
• AG Coakley sues big subprime lender Fremont (The Boston Herald).

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Do Mortgage Servicing Companies Charge Excessive 'Attorney Fees' When A Homeowner Goes Into Default?

(revised 10-10-07)
For those who think that they may have been clipped by a mortgage loan servicer for excessive attorney fees being added to their account while their home mortgage was in default (a predatory practice), Excessive Attorney Mortgage Fees: “I Almost Lost My Home”, at LawyersandSettlements.com may be of some interest.

See also, Excessive Attorney Fees: Homeowner Robbery, at LawyersandSettlements.com.

Go here for more on Excessive Attorney Mortgage Fees, and mortgage servicer Mortgage Electronics Registration Systems, Inc. ("MERS"). Reportedly:

• "MERS allegedly retains attorneys to handle foreclosure actions at a stated price but when the attorneys’ fees are passed along to the borrowers, MERS charges the borrowers more than it pays the foreclosure attorneys. Between what it pays the attorneys and what it charges borrowers, MERS keeps the difference as a profit to itself."

The existence of this practice, if true, lends support to the proposition that, financially, mortgage loan servicers might be far better off driving homeowners into foreclosure, pocketing inflated foreclosure fees and costs in the process, rather than trying to help a homeowner modify or otherwise work out their home mortgage loan. (However, the company or mortgage investment trust - and their certificate holders - who actually own the mortgage might not be too happy about it - they are the ones who will actually take the financial beating when a home is foreclosed.)

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Congress Considers "Forced Mortgage Modifications" For Homeowners In Bankruptcy; Elimination Of Credit Counseling For Ch. 13 Homeowners In Foreclosure

In a story that may be unpleasant news to some mortgage lenders, mortgage servicing companies, and some foreclosure rescue operators, Inman News reports:

• Legislation that would allow bankruptcy courts to modify the terms of a homeowner's mortgage loan could save 600,000 homes from foreclosure, the bill's sponsor claims. HR 3609, the Emergency Home Ownership and Mortgage Equity Protection Act of 2007, would repeal a legal provision that prohibits bankruptcy courts from modifying the repayment terms of home mortgages. Bankruptcy courts already have the power to modify payments on other secured debts, including mortgages on other properties. "Responsible lenders who made loans on reasonable terms have nothing to worry about in bankruptcy court, but predatory lenders will end up with the loans they should have made in the first place," said bill sponsor Rep. Brad Miller, D-N.C., in a press release.

For more, see Bill would let bankruptcy courts impose loan mods (Moody's: Subprime servicers modify only 1% of loans).

See also, House bill would let courts alter mortgages (Reuters) or here for same article) (ABC News).

Postscript: Section 5 of the proposed legislation, if passed, would eliminate the credit counseling requirement for homeowners facing foreclosure who have filed Chapter 13 bankruptcy.

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Homeowners In Foreclosure Being Clipped For Illegally Inflated Legal & Appraisal Fees, Says Lawsuit

In a class action lawsuit originally filed in a Delaware Federal Court in September, with an amended complaint filed yesterday, two Missouri homeowners accuse Mortgage Electronic Registration Systems, Inc. ("MERS"), a home loan registration system allegedly controlled by an all star team of nine big time nationwide mortgage lenders, of overcharging borrowers for legal services in foreclosures. MERS reportedly charged borrowers for "attorney fees" of as much as $1,200 - $2,000 and upwards (see Lawsuit - page 18, paragraph 49) while MERS is only charged $400 - $500 by the attorney actually handling the foreclosure (see Lawsuit - page 15, paragraph 36).

The lawsuit also accuses MERS of charging borrowers appraisal fees ranging from $300 to $500 for appraisals that are (1) often times not done at all, or (2) done but some times are nothing more than "drive by" appraisals where the appraiser never actually gets out of his or her automobile (see Lawsuit - page 19, paragraph 52).

In addition to MERS, the lawsuit names as additional defendants the following all star lineup of mortgage lenders who are allegedly the controlling shareholders of MERS:

• Citigroup, Inc., Countrywide Financial Corporation, Fannie Mae, Freddie Mac, GMAC-RFC Holding Company, LLC, (doing business as GMAC Residential Funding Corporation), HSBC Finance Corporation, JP Morgan Chase & Co., Washington Mutual Bank, and Wells Fargo & Company.

Among other things, the lawsuit alleges that "MERS is grossly undercapitalized to cover the potential liability stemming directly from its role as primary mortgagee on tens of millions of Mortgage Notes." Because of this, the homeowners / borrowers also seek to hold the above listed all star lineup of mortgage lenders jointly and severally liable for damages as well as MERS (see Lawsuit - page 8, paragraphs 9(l) and 9(m)).

Representing the homeowners are Carmella P. Keener, Wilmington, DE, Jeffrey M. Norton, New York City, and Matthew S. Chase, University City, MO.

--------------------

To view the lawsuit, see Trevino v. Merscorp Inc., et al..

For a media report which makes reference to this lawsuit, see Borrowers Face Dubious Charges in Foreclosures (subscription required; if no subscription, try here).

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Countrywide Fabricated Documents In Consumer Bankruptcy Case, Says Court Transcript

The New York Times reports:

• The Countrywide Financial Corporation fabricated documents related to the bankruptcy case of a Pennsylvania homeowner, court records show, raising new questions about the business practices of the giant mortgage lender at the center of the subprime mess. The documents — three letters from Countrywide addressed to the homeowner — claimed that the borrower owed the company $4,700 because of discrepancies in escrow deductions. Countrywide’s local counsel described the letters to the court as “recreated,” raising concern from the federal bankruptcy judge overseeing the case, Thomas P. Agresti. “These letters are a smoking gun that something is not right in Denmark,” Judge Agresti said in a Dec. 20 hearing in Pittsburgh.

***

• O. Max Gardner III, a lawyer in North Carolina who represents troubled borrowers, says that he routinely sees lenders pursue borrowers for additional money after their bankruptcies have been discharged and the courts have determined that the default has been cured and borrowers are current. Regarding the Hill matter, Mr. Gardner said: “The real problem in my mind when reading the transcript is that Countrywide’s lawyer could not explain how this happened.”

For more, see Lender Tells Judge It ‘Recreated’ Letters.

For additional documents in this case, see:

• Allegedly bogus letters from Countrywide,
• Transcript of Courtroom Exchange on the allegedly bogus Countrywide Letters.

Go here for other posts on the Countrywide matter in the Pittsburgh federal bankruptcy court.

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

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For more on the alleged misconduct and sloppiness by lenders and servicers against homeowners in the context of consumer bankruptcy cases, go here to download Misbehavior and Mistake in Bankruptcy Mortgage Claims, by Katherine M. Porter - University of Iowa - College of Law. questionable mortgage servicing practices tactics yak

Protesters "Storm" Ocwen Financial In Pouring Rain; Demand Halt In Predatory Practices

In West Palm Beach, Florida, The Palm Beach Post reports:

• Dozens of people poured out of a big yellow school bus in Wednesday's rain to protest what they said was Ocwen Financial's predatory lending practices. The group, members of ACORN, crowded into the lobby of Ocwen's headquarters, chanting loudly and demanding to talk to the chief executive of one of the country's largest subprime loan servicers. CEO William Erbey had ignored a letter ACORN sent to him in July asking for a meeting, protest organizer Brian Kettenring said.

• "This is kind of a poke in the eye to get his attention," Kettenring said. "I'm the Michael Moore of foreclosures." ACORN - Association of Community Organizations for Reform Now - wants Ocwen to stop foreclosures and evictions immediately, restructure loans based on borrowers' incomes and ability to pay, and offer to lock in the initial interest rate for the remaining terms of the loan for borrowers who cannot afford monthly payments that are about to reset at much higher interest rates.

For more, see Homeowners, activists insist lender modify mortgages.

Go here to watch WPEC-TV Channel 12's coverage of the protest.

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More On Alleged Fraudulent Claims By Countrywide In Consumer Bankruptcy Cases

In South Florida, the South Florida Sun Sentinel reports:

• In December, U.S. Bankruptcy Judge Paul Hyman in West Palm Beach told Countrywide to turn over internal documents relating to how the company calculates its claims to the U.S. trustee, a Justice Department official who monitors bankruptcies. Countrywide is appealing Hyman's order. It's the second such case in Florida and part of a national investigation by bankruptcy trustees of lenders, including Countrywide, in at least three other states, Pennsylvania, Texas and Arizona. The trustees want to know if the lenders are making false claims against bankrupt homeowners or using questionable proof to make them pay. U.S. personal bankruptcies rose 40 percent last year, according to the National Bankruptcy Research Center.

• "As a general principle, if it is judicially determined that lenders are intentionally attempting to rip off their customers with false or fraudulent proofs of claim, that would have serious consequences for lenders," U.S. Bankruptcy Judge A Jay Cristol, who's presiding over a similar case in Miami, said Tuesday in an interview.

For more, see Countrywide accused of false claims (Bankruptcy rumors sink stock) (When link expires, try here for the same story).

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

Go here , go here , and go here for posts on questionable mortgage servicing practices.

For more on the alleged misconduct and sloppiness by lenders and servicers against homeowners in the context of consumer bankruptcy cases, go here to download Misbehavior and Mistake in Bankruptcy Mortgage Claims, by Katherine M. Porter - University of Iowa - College of Law. questionable mortgage servicing practices tactics yak

Hedge Fund Entrance Into Mortgage Servicing Business Alarms Both Consumers & Investors

(originally posted 10-12-07)
An article by The Associated Press reports:

• Hedge funds and private equity investors are gaining a foothold in the business of mortgage loan servicing as some of the country's biggest mortgage lenders crash into bankruptcy. Their arrival on the scene has alarmed consumers and investors alike. Over the last few months several failed mortgage lenders -- including ResMae Mortgage Co., Aegis Mortgage Corp., and New Century Financial Corp. -- have sold their loan-servicing businesses to hedge funds or private-equity firms.

[...]

• Their acquisition of loan-servicing rights, as a result, has inflamed the anxieties of many homeowners who have reported loan-servicing disruptions recently. "From a consumer perspective, it's an improvement to have these loans in a mainstream bank," said John Taylor, chief executive of the National Community Reinvestment Coalition, a collection of community groups. "It's not an improvement for them to end up in the hands of Wall Street. There isn't the conversation or the accountability." When it comes to consumer-protection regulations, Taylor said, "Wall Street has a moat around it."

For more, see Hedge Funds Enter Mortgage Arena. questionable mortgage servicing practices tactics yak MortgageServicingIssuesAlpha

One View Of The Mortgage Loan Servicing Industry

For an interesting look at one point of view of the mortgage servicing industry, check out this YouTube video on mortgage servicing (suited only for those with a sense of humor). questionable mortgage servicing practices tactics yak

Suing A Mortgage Servicer? 20 Reasons For Having Them Fork Over The PSA

In The Bankruptcy Litigation and Consumer Rights Blog, consumer bankruptcy litigation attorney Max Gardner writes:

• Every time I file a civil action against a mortgage servicer the very first document I want is a copy of the “Pooling and Servicing Agreement.” This is the legal document that creates the securitized trust of mortgage loans and also strictly provides for the duties of all entities who are assigned the responsiblity of servicing loans for the Trust.

For 20 of the reasons you need to request through formal discovery in any mortgage-related lawsuit the PSA Agreement and why it is relevant, see Max Gardner’s Top Reasons for Wanting a Pooling Servicing Agreement.

Go here for more posts on homeowners and their attorneys who are using Federal & state consumer protection statutes to try and undo bad mortgage loans. undo mortgage loans TILA alpha questionable mortgage servicing practices tactics yak

Complaint Claims Consumer Clipped For $50K+ By Mortgage Servicer

According to a lawsuit recently filed in a West Virginia state court, Select Portfolio Servicing, Inc. (the firm formerly known as Fairbanks Capital Corp.) is being accused of collecting over $50,000 more than what was due from a West Virginia homeowner, whose mortgage balance had been previously reduced pursuant to a legal settlement in a previously litigated class action lawsuit. The current lawsuit, filed on November 14, 2007, alleges, among other things:

• "The Defendant [Select] failed to follow the ordered new payoff schedule consistent with the reduced loan. Despite the Court Order, the Defendant continued to treat the entirety of the loan as due, and have month-by-month demanded the full payment. Since January 2001, the Defendant has sent over eighty-two demands for payment that misrepresent the total amount due."

In a procedural maneuver, counsel for Select has filed a request last week to move the case from the state court to a West Virginia Federal Court.

Representing the consumer is attorney Daniel F. Hedges, Charleston, West Virginia.

To view the lawsuit, see Helen B. Moss v. Select Portfolio Servicing, Inc. f/k/a Fairbanks Capital Corp.

To view the request to move the case, see Notice of Removal. questionable mortgage servicing practices tactics yak