• Report: #239126

Complaint Review: Washington Mutual Bank

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  • Submitted: Thu, March 15, 2007
  • Updated: Thu, March 22, 2007

  • Reported By:Eldorado Illinois
Washington Mutual Bank
Mailstop: No70206, 19850 Plummer Street Chatsworth, California U.S.A.

Washington Mutual Bank Predatory Lending At It's Best Yet - Damaging Consumers State Wide Ripoff Chatsworth California

*Author of original report: Washington Mutual Bank Misunderstanding The Facts

*Consumer Comment: Your defensive response

*Author of original report: WAMU - you did everything but call me an idiot.Rebuttal

*Consumer Comment: Wamu

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We have had our home financed with Washington Mutual Bank for almost 7 years now. They are formally known as Long Beach Mortgage Corp.

Since this time, we not only had a pre-payment penalty, but we presently have an interest rate of 12.4%, which is against the law under the state of Illinois as the APR Cap is 11%.

During the course of our mortgage, we started to see thousands of dollars being demanded to go into our escrow account, even though it was included in our payment. To Date they are asking for another $6,000.00 plus to be put into escrow and are proceeding with foreclosure unless we pay the new and revised payment amount of $1,384.38. This amount doesn't include any late fees or other additional fees that they keep adding on and they refuse to provide any written explanation of charges regarding this matter that has been ongoing for 5 years now.

Since we have refused, due to them not substantiating the payment increase and our refusal to pay such, they have decided to proceed with foreclosure.

I have worked in the Banking Industry for years, in the collection and foreclosure of home departments of major lenders and I have never seen such outlandish and illegal practices in my lifetime.

Anyone that is going through this, please reply, as I have now contacted many Government Resources that will assist with these type of matters.

Good Luck and God Speed To Any and All Involved with these Shysters.

Cynthia
Eldorado, Illinois
U.S.A.

This report was posted on Ripoff Report on 03/15/2007 06:08 PM and is a permanent record located here: http://www.ripoffreport.com/r/Washington-Mutual-Bank/Chatsworth-California-91311/Washington-Mutual-Bank-Predatory-Lending-At-Its-Best-Yet-Damaging-Consumers-State-Wide-239126. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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#1 Author of original report

Washington Mutual Bank Misunderstanding The Facts

AUTHOR: Cynthia - (U.S.A.)

Once Again, you clearly did not read what I wrote.

We were not in default of our mortgage payments. They were always paid.

The Escrow Department Calculated the wrong yearly real estate taxes which subsequently created a deficit in our escrow account.
They had the yearly escrow payment being 3 times the amount it actually was.

It took me 3 years to fix this with the escrow department and they once again did the same thing this year, because it is in black and white on the VOM that we ordered.

We had troubles refinancing the ARM due to absorbent Medical Bills and Loss of Income as I became disabled, thus having to file a chapter 7.
That being on our record for 10 years, still puts us in a sub-prime position and we were unable to get a fixed rate mortgage.

We have contacted WAMU so many times and put in writing that our real estate taxes were 1337.82 this year and not almost $4,000.00.

By them calculating 3-4 times the estimated payment for the following year and adjusting the payments for it when they are in error of their calculations, would of course put you in default if you couldn't pay triple the house payment, or pay an unjustified escrow deficit in one lump sum.

We therefore kept up with our normal house payments which included the right impound amount for the taxes and Insurance, we just didn't pay the lump sum for the unjustified escrow shortage a/k/a/ deficit that they wanted.

I even had the county clerk call them to verify, that are taxes were only the specified amount.

My attorney also contacted them saying you can not impound for more than the taxes are minus possible inflationary percentage for the following year, and certainly not for 3 times the amount of the county assessment of taxes.

We then received a notice of a Lump Sum Payment being due on the mortgage, by a certain time frame. By not agreeing to pay that, with written argument and subsequent court filings and counter claims, we went into default.

Do you get my point now?

I don't owe the money, and yes I am fighting them in court and working with Hud and another HUD office in Chicago who reports predatory lending and excessive charges to the proper governing offices.

Wether or not they are allocated Attorney Fee's even with this being their error, I know, that this will be determined by the Judge.

In the meantime, we made our payments as indicated with the amount we are given if the ARM rate changes or not, until we were served with a notice of acceleration and demand of a lump sum payment.

Sheesh, people just don't read and comprehend.

This is not a gee I fell behind and failed to act situation, this is a Predatory Lending and a forever growing United States problem that occures so often with those with less than perfect credit, who then get stuck with a Lender like this.

It's also funny you mention the terms of the mortgage, because that issue will be highly addressed in court as well.

But come on. If you actually owed a bill for $100.00, would you turn around and pay a bill that was incorrect saying you owed $400.00?

I don't think so.

I think you failed to understand the whole concept of the situation at hand, and labeled me as a consumer who didn't pay attention and just simply ignored the situation and fell into trouble, with the implication that I was ignorant to the fact that I had a mortgage payment to pay with the ARM rate that presently applied after any adjustments.

I just want to scream !!!!

Why would anyone and I mean anyone, pay for something that they do not owe and are constantly being overcharged because someone can not imput the right data into an impound account, or a Lender that simply wants to sqeeze every sponge until it is dry.

Consumers, should never have to experience that with any Lending Institution, ever!

Yes, they apologized for the first error, and made the correction after we paid in over $9,000.00+ in escrow overpayments, just like they told us to do, while I was trying to get the situation corrected.

Then they did it again and this had nothing to do with attorney fees, as they have no remote association with an Escrow Account.

This time however, we refused to go through this again when they wanted the unjustified deficit amount curred.

We are still trying to get the corrections made, get our money back and get back on track with them. However know this, we just didn't let our mortgage payments slide, we paid them and at an absorbant amount I might add, until we had had enough of yet another mistake and attempt to bleed us dry once again.

But no more, this is now at the hands of a great Foundation, HUD and their Governmental Affiliations and back to court.

No one should have to be ripped off with irroneous charges, not including attorney fees, which of course are either allowed by the judge or not.
This just shouldn't happen to anyone that takes the time to stay on top of things, by being responsible and keeping track of Lending Practices and charges.

All we wanted to do was pay the mortgage off and get away from Washington Mutual Bank, by obtaining a fixed rate mortgage.
WAMU simply made it impossible with at least 7 different payoff statements, no substantiation of such, no replies, and refusal of the pay-off department to speak with the Lender that had approved our loan, and only wanted a validation of the issued payoff statements, in order to wire the funds and fund our Loan.

We just couldn't get answers, regardless of our on time payment history.

WAMU's escrow error made it impossible at that point to re-finance because the payoff department wouldn't speak to any Lender about the various payoff statements, with the escrow deficit increasing each and every time.

At this point I felt like I was being held prisoner by WAMU.
How could a Lender payoff the loan with a re-fiance to us, without substantiating the misscellanious and irroneous escrow deficiencies on every payoff statement. It just completely whiped out the LTV that each new Lender was looking for.

So here we are, going to court, taking it to every Governing Agency and hoping and praying that in the end Justice Will Prevail.

And we will not be put into a category of a misguided homeowner, who although made their payments still messed things up somewhere along the line according to your opinion.

What matters most, is that I know the truth, I have substantiation of the Truth and so does my lawyer, HUD, The Foreclosure Foundation that is helping us and the regulating agencies.

I sincerely hope you get it this time.

People can make bad choices in their finances, or which Loan type they use when they buy their home, or get stuck in that position simply to buy that home, but people do not deserve to be labeled as a slacker and one that just let the big one get away.

I know that justice will prevail.........
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#2 Consumer Comment

Your defensive response

AUTHOR: Charlene - (U.S.A.)

Cynthia,

Your response to my posting was quite defensive.

Yes when a homeowner has an escrow account, yes the additional Real Estate taxes are paid from it, but to make up the deficiency of course Washingtom Mutual will ask it from you.

You never addressed whether you refinanced out of the Adjustable Rate Mortgage.. this can explain why your interest rate and payment continually rise. AGAIN.. after the initial introductory interest rate adjusts, the rate will adjust again every 6 months.

You state, that you " DIDN"T CHOOSE" WAMU, your mortgage was sold to them. First of all, if you have a problem with the " prepayment penalty and the interest rate, you must look to the original lender, after all they are the ones that set the mortgage terms in place, rate/ and prepayment.

Predatory lending? Yes, I am quite aware of predatory lending, because WAMU has requested that you add funds to your escrow, I don't find this predatory at all.

The fact of the matter is this.. if WAMU is trying to foreclose on you, you may have ignored the warnings, and the additional monies that you say they have added, just may be their legal fees.

I have nothing to gain from taking this position, I do not represent WAMU in any fashion, however, I will again repeat, if you don't like your loan that was sold to WAMU, look to your original lender, THEY are the ones that structured this loan, including your interest rate, when it adjusts, and the prepayment period. And no, I am correct, if you are a subprime borrower, you cannot be assessed a prepayment penalty if the initial rate is over 8%. AGAIN.. this DID not apply 7 years ago.

It seems clear that you got into an adjustable rate mortgage and just never refinanced into a fixed. It could have been that you forgot, the increase in the payments was not a burden, or maybe, you didn't qualify for a fixed rate.

I have no insults here, eimply facts.. it would appear that you let this get away from you a long time ago, you should have acted on it immediately, instead of just " not paying" now your in a jam and want to blame WAMU?
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#3 Author of original report

WAMU - you did everything but call me an idiot.Rebuttal

AUTHOR: Cynthia - (U.S.A.)

Regarding Charlene - Chicago, Illinois

Well I must say that you did everything but call me an idiot.

First, real estate taxes that are due are adjusted accordingly with your payment through any and all Lenders Escrow Department, and yes this was accounted for. Everyone knows this.
Additionally when we closed the loan there was in fact a pre-payment penalty clause in the mortgage contract for 3 years, which of course no longer applies. However, if you believe that this is no longer being done, then you are sadly mistaken, because we were quoted on many occassions during refiance efforts recently that there was indeed going to be a pre-payment penalty clause in our contract.

This is very common with sub prime loans, not to mention the predatory lending circuit.
The ARM is simply what it is, it goes up according to the prime rate and what the federal reserve board and economic marketplace is doing in the economy at the time.
The problem started, when they didn't pay our property taxes for 2 years and I was notified by the county, subsequently I contacted WAMU. Instead of counting it as 2 years past due, they counted it as a normal per year tax due, thus increasing our escrow requirements and creating a negative escrow balance.

WAMU after 3 years of faxing proof of each years real estate bill to prove that they were impounding the wrong amount, reviewed the matter apologized and corrected the problem.

When we went to refinance, WAMU then came back once again with a negative escrow - impound amount of over $6,000.00. Hard to believe I know but when are taxes are no more than 1,300.00 per year and our Homeowners being $569.00 per year.
This does not add up to a 12,000.00 final negative reimbursement amount that they wanted before closting. Yet this negative balance had all been accrued when we had requested a written pay-off statement, and not before hand on any statement ever received by them. So all this time we though we had everything fixed and all was well. Well, surprise, surprise!!!

Although there was no pre-payment penalty, there might as well as been, because by the time we got down to brass tactics, after the pro rata apr, we were still being requested to pay them an absorbant amount of $28,000.00 in generalized but never itemized fees. Even When we requested the VOM, it was produced as multiple expenditures, and every time I called the pay-off department I was hung up on, and no written communications were ever answered.

Therefore, I pulled my contacts and resources together and decided to go out after them with blazing guns instead of the other way around. Afterall, isn't a human being supposed to protect their family, not mention due their duty to mankind in general so that this does not happen again to someone else, regardless of experience in mortgage contracts or any lack of knowledge thereof, it is just not right to let it occur again.

In conclusion, before one proceeds to assume that the consumer is a blooming idiot, they may want to consider that the consumer has made all necessary attempts to work right along with the lender and that they had exhausted all resources and patience in order to resolve the matter.

It is just disheartening that someone would assume that Predatory Lending doesn't exist and that it is the consumer's fault, when we had never missed a payment. This Industry has grown by leaps and bounds, with few resources to moderate such activity.

I also wonder if research itself was done, before this opinion was written on WAMU and also found that they have a pending class action suit against for matters exactly like this.

I put down almost $15,000.00 on our home to keep the payments low, and for quite some time, there were no increase nor decrease with the Interest Rates. Current market adjustment, just doesn't seem to be in their vocabulary. Unless of course it is to their benefit. Even with the lowering of Interest Rates by the Federal Reserve Board hopefully later this year. Heck we are already so far in the hole with the deficit, why the heck not.

Howver, if I walk away now, then they have won.
The only reason that they want to proceed with Foreclosure in the first place, is because they tried to add all those thousands of dollars onto our mortgage payments and we irrevocably refuse to pay for something that we do not owe, nor was our mistake to begin with. So we just kept making our normal payments until their resolution and legal action could make us do otherwise.
Our taxes have been the same within just a few dollars since we bought this place, and we stand firm, especially after receiving and seeing first hand each and every added on charge on the VOM.

That is why I have contacted my Governor, The Division of Thrift Supervision and the Federal Trade Commission. One unknowledgeable person like me, before doing so, would also have a 7 year paper trail to substantiate such a fact, don't you think?
Did I do my homework, you betcha, and I refuse to let this happen to someone else.

Never assume that it is the consumer and not an Industry mistake, as it is err to be human, regardless of your financial standing, money, connections, power or resources.

What matters most in this world is being lost each and every day by people like you, who judge before actually knowing the facts.

That fact, is simply by being a kind human being, and above all caring and looking at both perspectives of the situation at hand, before jumping to an opinion such as you have.

My only hope with this rip-off report post, was to warn consumers before doing business with WAMU, because rest assured all those clients in the class action suit, I'm sure, would have liked to have been warned or to at least have more information at hand before jumping into the frying pan.

I did not finance, with WAMU, they bought my mortgage. They were not my choice, it was theirs, and now I'm going to make sure that this doesn't happen to someone else.
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#4 Consumer Comment

Wamu

AUTHOR: Charlene - (U.S.A.)

The interest rate is high, I will agree, you don't mention if you had a fixed rate mortgage or a Adjustable rate mortgage that you never refinanced. Perhaps that is why the rate is so high?

The regulation against prepayment penalties have not been around for 7 years, just about 2years, same with the new APR regs.

You say you have dealt with Wamu for 7 years, you question the escrow amount, yet perhaps you haven't payed additional funds for increasing real estate taxes? And if this has been going on for what you state as years, I can see why it is so much at this time.

If you didn't refinance out of an adjustable rate mortgage, or cooperated with WAMU for additional monies for escrow for increased Real Estate taxes, which DO go up every year, you have no one to blame as far as I can tell, WAMU has done no wrong, actually they have been quiet patient with you.

You state that you worked in the banking industry, but obviously are quite naive.. everyone knows that Real Estate taxes increase, which in turn means you have to pay more each month if you have them escrowed. Prepayments do not run a course of 5 years or 7 years, the average is 2 to 3 years. Again, quite obvious, you never refinanced into a fixed rate, your introductory rate adjusted and will continue to adjust every 6 months.. its spelled out in your mortgage papers. The fact that you apparently only payed the original payment doesn't mean you don't owe WAMU the money, if you don't pay up, they will start foreclosure and they will be successful.
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