Complaint Review: Ameriquest - Orange California
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- Ameriquest 505 City Parkway West Suit 100 Orange, California U.S.A.
- Phone: 800-463 0386
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- Category: Mortgage Companies
Ameriquest Is ripping off - Old People. Consumer Concerns for Older Americans Helping Elderly Homeowners Victimized by Predatory Mortgage Loans Orange California
*Consumer Comment: Mortgage Servicing Fraud, Fees, Escrow and Forced Insurance
*Consumer Comment: Mortgage Servicing Fraud, Fees, Escrow and Forced Insurance
*Consumer Comment: Mortgage Servicing Fraud, Fees, Escrow and Forced Insurance
*Consumer Comment: Mortgage Servicing Fraud, Fees, Escrow and Forced Insurance
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Home > Initiatives > Seniors Initiative > Helping Elderly Homeowners Victimized by Predatory Mortgage Loans Printer-friendly
Consumer Concerns for Older Americans
Helping Elderly Homeowners Victimized by Predatory Mortgage Loans Equity-rich, cash poor elderly homeowners are an attractive target for unscrupulous mortgage lenders. Many elderly homeowners are on fixed or limited incomes, yet need access to credit to pay for home repairs, medical care, property or municipal taxes, and other expenses. The equity they have amassed in their home may be their primary or only financial asset. Predatory lenders seek to capitalize on elders' need for cash by offering "easy" credit and loans packed with high interest rates, excessive fees and costs, credit insurance, balloon payments and other outrageous terms.
Deceptive lending practices, including those attributable to home improvement scams, are among the most frequent problems experienced by financially distressed elderly Americans seeking legal assistance. This is particularly true of minority homeowners who lack access to traditional banking services and rely disproportionately on finance companies and other less regulated lenders. But there are steps advocates can take to assist victims of predatory mortgage loans.
A FEW EXAMPLES . . .
Betsy , 70 years old, obtained a 5-year mortgage in the amount of $54,000 at a rate of 12.85%. Paying $596 a month, she will still be left with a final balloon payment of nearly $48,000 in 2011, when she will be 83 years old.
Arletta , 68 years old, took out a mortgage on her home in the amount of $20,334 in the early 1990s. Her loan was refinanced six times in as many years, bringing the final loan amount to nearly $55,000. She paid for credit life insurance all six times, with each premium exceeding $2,300.
The mortgage loan of Sam , 72 years old, was refinanced three times in four years, twice by the same company. Over the course of the three refinancings, the loan amount doubled, from about $16,500 to $33,000. The final loan had an interest rate of 16.85%. Living on Social Security and unable to afford the monthly payments, Phillips sought bankruptcy in an attempt to save his home.
WHY PREDATORY LENDING AND FORECLOSURES ARE ON THE INCREASE
Several factors have lead to the increase in predatory mortgage lending. Among them is the deregulation of the consumer credit industry in the 1980s which lead to the weakening of state regulatory and consumer protection statutes. A change of the tax code in 1986, which established a preference for second mortgage interest over interest on other consumer loans, led to aggressive marketing by lenders of the tax benefits of home equity loans. Consequently, many formerly unsecured obligations such as medical bills and credit card debt, are now folded into higher-rate loans secured by homes even if the low-income consumer gets little or no tax benefit.
Another important factor is the increase in real estate property values in the 1990s. Some predatory lenders profit by making loans based solely on the value of the collateral, the equity in the home, rather than the homeowner's ability to repay the loan. This practice is profitable because if the homeowner cannot repay this high-rate, high-fee loan, the lender forecloses, purchases the home at auction, and resells it at a profit. This problem disproportionately affects the elderly, since they frequently have substantial equity built up over a long period of time and have little income to repay these loans. Elderly homeowners who have sought legal assistance frequently say that they were unaware of the terms of the loan agreement they were signing. Often the terms of the loan are not fully explained to the elder. At other times, home improvement companies, who often act as brokers for many of these predatory mortgage loans, will use high pressure tactics or engage in other behavior to intentionally misrepresent or obscure the terms of the loan or its true cost. When elders get loans they cannot afford, they quickly fall behind and ultimately face foreclosure.
HOW TO IDENTIFY PREDATORY MORTGAGE LOANS
There are several "warning signs" that a loan may be abusive or predatory. Not all loans containing one or more of the following attributes are predatory loans. However, the features listed below are often associated with such loans.
Misrepresentation or fraud in the solicitation, marketing or origination of the loan. For example, a lender may falsify a loan application to make it appear that an elderly applicant has enough income to qualify for a loan. A lender who desires to profit from a homeowner's equity by making a loan the elderly homeowner cannot afford to pay, and which will ultimately lead to foreclosure, may engage in this behavior.
Home improvement scams. Home improvement contractors often steer elderly homeowners to predatory mortgage companies under the guise of arranging financing to pay for the home improvement. The work is generally overpriced, and often incomplete or done in an extremely shoddy manner. The contractor may obtain a commission for acting as a broker on the loan.
High interest rate. In many cases, the high interest rate cannot be justified by the risk and costs of providing credit to elderly homeowners. Predatory lenders often disguise the true costs of loans by using adjustable rate mortgages having an artificially low interest rate and monthly payment, called a "teaser" rate, for a limited period of generally six months to two years. For elderly homeowners on fixed incomes, an increase in the monthly payment after the initial period can be devastating.
High closing costs and fees.
Closing costs include points, broker's fee, document preparation fees, appraisal and attorney fees which are deducted from the proceeds of the loan. These fees may be much greater than the actual cost of the item or service provided, or duplicative of other itemized fees and costs.
Balloon payments. A balloon payment is a large lump sum of money due at the end of the term of the loan. Homeowners who cannot meet the balloon payment will lose their home to foreclosure unless they refinance the loan, often at an excessive cost.
Excessive prepayment penalty. Lenders often impose excessive and unfair prepayment penalties to make even more profit if the homeowner attempts to refinance.
Multiple refinancing. This practice is also referred to as "flipping." Lenders encourage homeowners (especially those with balloon payments described above) who are in need of credit, or who are in default, to refinance their loan with the lender or an undisclosed affiliate of the lender. The new loan pays off the balance of the existing loan, including any prepayment penalty embedded in that loan. The resulting loan has a higher principal balance and a new set of closing costs and fees based on that higher balance. A loan may be refinanced several times in this manner. Each time the loan is refinanced the lender receives a new set of closing costs and fees, which leads to depletion in equity with littler or no benefit to the elderly homeowner.
Credit insurance. Lenders will sell credit life insurance, credit accident and health insurance, or involuntary unemployment insurance, as part of the loan. This insurance is extremely profitable for the lender, as the lender often owns the insurance company, or receives a commission for the sale of the insurance. In addition, the insurance premium is financed over the life of the loan which increases the total interest charged on the principal. Because it is profitable, credit insurance is often sold to individuals who will not benefit from it.
Negative amortization.
The lender structures the loan such that the monthly payments do not cover the amount of interest due each month on the loan, and the principal balance therefore increases each month. At the end of the loan term in a negative or non-amortizing loan, the borrower owes more than the amount originally borrowed. Mortgage broker kickbacks. Borrowers pay a fee to a broker to obtain the best available rate on a loan; the fee is usually financed as part of the loan. The broker, however, may also receive a separate fee or a commission from the lender for referring the homeowner to the lender. Instead of receiving the best rate that he or she qualifies for, the borrower may pay a higher interest rate because the broker is receiving a kickback from the selected lender. The fee the lender pays to the broker is passed on to the homeowner in the form of a higher interest payment over the loan term. On loan documents this is referred to as a yield spread premium.
Making loans the elderly homeowner cannot afford to repay. These loans are made based solely on the amount of equity in a property, and are made to individuals who do not have the income to repay the loan. Elderly homeowners are particularly vulnerable to this practice because they have limited or fixed incomes and have substantial equity in their homes.
Refinancing unsecured debt. Lenders encourage homeowners to finance or consolidate unsecured debt, such as credit cards or medical costs, into the mortgage loan. Homeowners are told it is a way to lower monthly payments and increase their tax deduction. Lenders do not mention that the higher home-secured debt burden increases the risk of foreclosure when the elder faces financial distress.
LEGAL CHALLENGES TO PREDATORY MORTGAGE LOANS
Elderly homeowners who have been victimized by predatory mortgage lenders have a number of legal options. What follows is a brief summary of some legal options advocates can use to challenge abusive mortgage lending. These claims are complex; please consult the additional resources listed at the end of this Consumer Concern.
The Truth in Lending Act (TILA)
Under the Truth in Lending Act1 a homeowner has a right to rescind a non-purchase money loan secured by his or her primary residence. This includes home equity loans and home improvement loans, whether first or second mortgages, so long as the proceeds of the loan were not used to purchase the home. The homeowner must be provided with a notice of the right to cancel. The homeowner has a right to rescind the loan for up to three business days after the transaction and an extended right to rescind the loan for up to three years if he or she was not given a notice of the right to cancel the loan, or if he or she did not receive notice with all of the required material disclosures. TILA also requires lenders to disclose the terms of loans in an understandable manner. The National Consumer Law Center's Truth in Lending manual provides detailed information on how TILA can be used to challenge predatory loans.
Home Ownership and Equity Protection Act (HOEPA)
The Home Ownership and Equity Protection Act (HOEPA), an amendment to TILA, covers certain high rate home equity loans.2 In addition to notice of the right to cancel and other disclosures required by TILA, if a loan is covered under HOEPA, lenders must provide borrowers with additional disclosures of the APR and monthly payment three days prior to closing. These disclosures must also include provisions telling the borrower that they are not required to sign the loan agreement simply because they received the disclosure statements, and they may lose their home if they do not meet their obligations under the terms of the loan. In addition to the disclosure requirements, HOEPA prohibits the inclusion of certain terms in the loan contract. A loan covered under HOEPA may not include the following: a term which increases the interest rate in the event of default; balloon payments in loans of less than five years; negative amortization; more than two prepaid payments; extending credit to individuals without regard to their ability to repay the loan; and disbursement of funds payable solely to a home improvement contractor instead of jointly or solely to the consumer. Most prepayment penalties are also prohibited.
Violations of HOEPA's disclosure provisions and inclusion of prohibited contract terms will give rise to civil liability for actual damages, statutory damages and attorney fees and costs. In addition, there are special enhanced damages, of finance charges and fees paid by the consumer, for material violations. HOEPA violations are also subject to the TILA's extended right to rescind. Assignees of loans covered under HOEPA are liable for all claims and defenses with respect to the assigned mortgage that the consumer could assert against the originator of the loan, except to the extent of certain limitations on damages.
Real Estate Settlement and Procedures Act (RESPA)
Among other provisions, the Real Estate Settlement and Procedures Act (RESPA)3 prohibits the payments of unearned fees and kickbacks. A lender kickback to a mortgage broker for making a referral is forbidden. The remedy for violation of this provision is treble damages and attorney fees.
State Unfair and Deceptive Acts and Practices Laws
Many of the abusive practices and loan terms found in predatory mortgage loans can be challenged under state unfair and deceptive acts and practices (UDAP) laws.4 If a state's UDAP statute covers the type of transaction or the creditor involved, advocates may bring claims for practices such as repeated and unnecessary refinancing ("flipping") of loans, making unaffordable loans to consumers to acquire the equity in the property, or misrepresenting the loan terms. Excessive fees and costs, and other terms that are disadvantageous to the borrower may be challenged as well. Other Laws
In addition, warranty law, usury, unconscionability, breach of fiduciary duty, fraud, and contract law have remedies which may prove helpful in challenging abusive loans. Other laws, including the Equal Credit Opportunity Act and the Fair Housing Act, have also been used to challenge these practices.
FOR MORE INFORMATION
Several manuals published by the National Consumer Law Center as part of the Consumer Credit Series will be helpful for advocates challenging these practices.
Stop Predatory Lending: A Guide for Legal Advocates (January 2002)
Truth in Lending (4th ed. 1999 and Supp.)
The Cost of Credit: Regulation and Legal Challenges (2nd ed. 2000)
Repossessions and Foreclosures (4th ed. 1999 and Supp.)
Unfair and Deceptive Acts and Practices (4th ed. 1997 and Supp.)
Consumer Bankruptcy Law and Practice (6th ed. 2000)
Consumer Concerns for Older Americans "Home Improvement Scams Alert"
American Association of Retired Persons (AARP), Consumer Affairs Division, 601 E. Street, N.W., Washington, D.C. 20410, (202) 434-6044 or http://www.aarp.org
Federal Trade Commission, Office of Consumer/Business Education, 7373 147th St. N.W. Washington, D.C. 20580. The FTC has several publications on home equity fraud on its website at www.ftc.gov/bcp/menu-lending.htm or call 1-877-FTC-HELP.
_____________________________
1 15 U.S.C. 1601 et seq. For more information, see generally National Consumer Law Center, Truth in Lending (4th ed. 1999 and Supp.).
2 15 U.S.C. 1639. The effective date of HOEPA was October 1, 1995. For a discussion of HOEPA, see National Consumer Law Center, Truth in Lending, Ch. 10 (4th ed. 1999 and Supp.).
3 12 U.S.C. 2601 et seq. See generally National Consumer Law Center, The Cost of Credit: Regulation and Legal Challenges, 11.3 (1995).
4 See generally National Consumer Law Center, Unfair and Deceptive Acts and Practices (4th ed. 1997 and Supp.).
This publication was supported, in part, by a grant from the Administration on Aging, Department of Health and Human Services, Washington, D.C. 20201. Grantees undertaking projects under government sponsorship are encouraged to express freely their findings and conclusions. Points of views or opinions do not, therefore, necessarily represent official Administration on Aging policy.
Bill & Ted
Orange, California
U.S.A.
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#4 Consumer Comment
Mortgage Servicing Fraud, Fees, Escrow and Forced Insurance
AUTHOR: Bill & Ted - (U.S.A.)
SUBMITTED: Friday, January 20, 2006
This may help
Mortgage Servicing Fraud, Fees, Escrow and Forced Insurance
Homes are being stolen, families degraded by unscrupulous servicing companies. A few cases have come to trial only to be settled with a miserable amount to the victims.
As a result of these settlements, e.g. Fairbanks, the records are sealed, victims have not received full restitution, and the end result victims are bound to silence.
The worst part is the company is allowed to continue its so-called amended practices.
This is a SLAP IN THE FACE for the American public. Why is there no justice for these victims of servicing fraud?
There is much more to be done. Legislation has been enacted for anti-predatory laws in various states. There is a greater issue that of Predatory Servicing and their fiduciary responsibilities.
Gone are the days when you would go to your local bank and get a mortgage for a new home and know that they would service and maintain your account. Instead they sell the servicing rights to others, companies such as Litton Loan Servicing, Ocwen Federal, EMC, and so many more.
Anyone remember the Household Finance Class action, still in business and many victims still devastated. Now they continue business with a parent company, named HSBC.
There is justice: A Legal Remedy
Can You Fire Your Mortgage Servicer?
Press here for more information.
Mortgage Servicing Rules
* Your current servicer usually must notify you at least 15 days before the effective date of the transfer of your loan servicing.
* During a 60-day grace period, you cannot be charged a late fee if you mistakenly send your mortgage payment to the old servicer
and
* The new servicer cannot report to a credit bureau that payments were late.
* Write to the servicer if you think there are any problems with your account.
* Within 60 business days of receiving your inquiry, the servicer must correct your account or determine it is accurate.
* Do not subtract any disputed amount from your mortgage payment. The servicer may consider this different amount to be a partial payment and declare the mortgage in default.
When you apply for a home mortgage, you may think that the lender, or loan originator, will service the loan until it is paid off or your house is sold. This is not always true. In today's market, mortgage servicing rights often are bought and sold.
If you are notified that your home mortgage servicing has been sold to another company, you may wonder how it will affect your loan terms and monthly payments. Some consumers have complained that they were not given enough notice of loan servicing transfers and were unfairly charged late fees and penalties.
In 1990, the National Affordable Housing Act was passed to address some of these concerns. This brochure explains what a mortgage servicer does and what your rights are under the Housing Act It also tells what you can do if you have a complaint about the transfer of your loan servicing.
What are the responsibilities of a Mortgage Servicer?
The mortgage servicer collects your monthly payments and handles your escrow account. An escrow account is a fund that your lender establishes in order to pay property taxes and hazard insurance as they become due on your home during the year. In this way, the lender uses the escrow account to guard its investment in your home.
When your escrow account is first established, your mortgage servicer must give you a statement telling you the estimated taxes, insurance premiums and other charges that are anticipated over the next 12 months and the expected totals of those payments.
The mortgage servicer also is required to give you an annual statement that details the activity of your escrow account. This statement shows your account balance and reflects payments for property taxes and homeowners insurance.
What does the Housing Act Require Lenders or Servicers To Do?
To protect consumers, the National Affordable Housing Act requires lenders or servicers to do the following.
Provide a disclosure statement.
The disclosure statement says whether the lender intends to sell the mortgage servicing immediately; whether the mortgage servicing can be sold at any time during the life of the loan; and the percentage of loans the lender has sold previously. During 1992, lenders must disclose the percentage of loans for which the servicing was sold in 1990 and 1991. This will change beginning in 1993, when lenders will have to report figures for the previous three years. The percentages will be noted in the ranges 0-25%, 26-50%, 51-75%, and 76-100%. The lender also must provide information about servicing procedures, transfer practices, and complaint resolution.
If you have a face-to-face interview with a lender, you must receive the disclosure statement at the time of the loan application. If you apply for a loan by mail, the lender has three business days to send you the disclosure statement after receiving your application. If you do not return a signed disclosure statement, the lender cannot fund a mortgage for you.
Give proper notification when the loan servicing is going to be sold
If your current servicer plans to sell your loan servicing, you must be notified at least 15 days before the effective date of the transfer unless you received a written transfer notice at settlement. The effective date is when the first mortgage payment is due at the new servicer's address. Under certain circumstances, the current servicer has up to 30 days after the effective date of the transfer to send you notification. These circumstances include:
* The lender terminates the contract because, for example, you have defaulted on the loan.
* The servicer files for bankruptcy.
* The Federal Deposit Insurance Corporation or the Resolution Trust Corporation begins proceedings to take over the servicer's operations.
Include certain information in the notice.
If your loan servicing is going to be sold, you should receive two notices-one from the current servicer and one from the new mortgage servicer. The new servicer must notify you not more than 15 days after the transfer has occurred. The notices must include the following information:
* the name and address of the new servicer.
* the date the current servicer will stop accepting mortgage payments, and the date the new servicer will begin accepting them.
* free or collect call telephone numbers for both the current servicer and the new servicer that you can call for information about the transfer of service.
* Information that tells whether you can continue any option insurance, such as mortgage life or disability insurance, and what action, if any, you must take to maintain coverage. You also must be told whether the insurance terms will change.
* A statement that the transfer will not affect any terms or conditions of the contract you signed with the original mortgage company, other than terms directly related to the servicing of such loan. For example, if your old lender did not require an escrow account, but allowed you to pay property taxes and insurance premiums on your own, the new servicer cannot demand that you establish such an account.
Grant a grace period during the transfer of the loan servicing.
After the transfer, there is a 60-day grace period. During this time you cannot be charged a late fee if you mistakenly send your mortgage payment to the old mortgage servicer instead of the new one. In addition, the fact that your new servicer may have received your payment late cannot be reported to a credit bureau.
Respond promptly to written inquiries.
If you believe you have been improperly charged a penalty or late fee, or there are other problems with the servicing of your loan, contact your servicer in writing. Be sure to include your account number and explain why you believe your account is incorrect.
Within 20 business days of receiving your inquiry, the servicer must send you a written response acknowledging your inquiry. Within 60 business days, the servicer must either correct your account or determine it is accurate. The servicer must send you a written notice of what action it took and why.
Do not subtract any disputed amount from your mortgage payment. Many mortgage servicers will refuse to accept what they consider to be partial payments. They may return the check and charge a late fee, or declare the mortgage is in default and start foreclosure proceedings.
Cranston Gonzales Act, 12 U.S.C. 2605
Obligations of Mortgage Servicers
What Can You Do If You Have a Complaint?
If you believe the servicer has not responded appropriately to your written inquiry, contact your local or state consumer protection office. If your lender is certified by the Department of Housing and Urban Development (HUD), you may want to file a complaint with HUD. Write: Office of Single Family Housing, HUD, Room 9282, Washington, D.C. 20410.
You also can send your complaint to the FTC. Write to: Correspondence B ranch, Federal Trade Commission, Washington, D.C. 20580. Although the FTC generally does not intervene in individual cases, the information you provide may indicate a pattern of possible law violations requiting action by the Commission.
You also may want to contact an attorney to advise you of your legal rights. Under the National Affordable Housing Act, consumers can initiate class action suits and obtain actual damages, plus additional damages, for a pattern or practice of noncompliance. In successful actions, consumers also may obtain court costs and attorneys fees.
FTC Headquarters
6th & Pennsylvania Avenue, N.W.
Washington, D.C. 20580
(202) 326-2222
TDD (202) 326-2502
FTC Regional Offices
1718 Peachtree Street, N.W., Suite 1000
Atlanta, Georgia 30367
(404) 347-4837
10 Causeway Street, Suite 1184
Boston, Massachusetts 02222-1073
(617) 565-7240
55 East Monroe Street, Suite 1437
Chicago, Illinois 60603
(312) 353-4423
668 Euclid Avenue, Suite 520-A
Cleveland, Ohio 44114
(216) 522-4207
100 N. Central Expressway, Suite 500
Dallas, Texas 75201
(214) 767-5501
1405 Curtis Street, Suite 2900
Denver, Colorado 80202-2393
(303) 844-2271
11000 Wilshire Boulevard, Suite 13209
Los Angeles, California 90024
(310) 575-7575
150 William Street, Suite 1300
New York, New York 10038
(212) 264-1207
901 Market Street, Suite 570
San Francisco, California 94103
(415) 744-7920
2806 Federal Bldg., 915 Second Ave.
Seattle, Washington 98174
(206) 553-4656
#3 Consumer Comment
Mortgage Servicing Fraud, Fees, Escrow and Forced Insurance
AUTHOR: Bill & Ted - (U.S.A.)
SUBMITTED: Friday, January 20, 2006
This may help
Mortgage Servicing Fraud, Fees, Escrow and Forced Insurance
Homes are being stolen, families degraded by unscrupulous servicing companies. A few cases have come to trial only to be settled with a miserable amount to the victims.
As a result of these settlements, e.g. Fairbanks, the records are sealed, victims have not received full restitution, and the end result victims are bound to silence.
The worst part is the company is allowed to continue its so-called amended practices.
This is a SLAP IN THE FACE for the American public. Why is there no justice for these victims of servicing fraud?
There is much more to be done. Legislation has been enacted for anti-predatory laws in various states. There is a greater issue that of Predatory Servicing and their fiduciary responsibilities.
Gone are the days when you would go to your local bank and get a mortgage for a new home and know that they would service and maintain your account. Instead they sell the servicing rights to others, companies such as Litton Loan Servicing, Ocwen Federal, EMC, and so many more.
Anyone remember the Household Finance Class action, still in business and many victims still devastated. Now they continue business with a parent company, named HSBC.
There is justice: A Legal Remedy
Can You Fire Your Mortgage Servicer?
Press here for more information.
Mortgage Servicing Rules
* Your current servicer usually must notify you at least 15 days before the effective date of the transfer of your loan servicing.
* During a 60-day grace period, you cannot be charged a late fee if you mistakenly send your mortgage payment to the old servicer
and
* The new servicer cannot report to a credit bureau that payments were late.
* Write to the servicer if you think there are any problems with your account.
* Within 60 business days of receiving your inquiry, the servicer must correct your account or determine it is accurate.
* Do not subtract any disputed amount from your mortgage payment. The servicer may consider this different amount to be a partial payment and declare the mortgage in default.
When you apply for a home mortgage, you may think that the lender, or loan originator, will service the loan until it is paid off or your house is sold. This is not always true. In today's market, mortgage servicing rights often are bought and sold.
If you are notified that your home mortgage servicing has been sold to another company, you may wonder how it will affect your loan terms and monthly payments. Some consumers have complained that they were not given enough notice of loan servicing transfers and were unfairly charged late fees and penalties.
In 1990, the National Affordable Housing Act was passed to address some of these concerns. This brochure explains what a mortgage servicer does and what your rights are under the Housing Act It also tells what you can do if you have a complaint about the transfer of your loan servicing.
What are the responsibilities of a Mortgage Servicer?
The mortgage servicer collects your monthly payments and handles your escrow account. An escrow account is a fund that your lender establishes in order to pay property taxes and hazard insurance as they become due on your home during the year. In this way, the lender uses the escrow account to guard its investment in your home.
When your escrow account is first established, your mortgage servicer must give you a statement telling you the estimated taxes, insurance premiums and other charges that are anticipated over the next 12 months and the expected totals of those payments.
The mortgage servicer also is required to give you an annual statement that details the activity of your escrow account. This statement shows your account balance and reflects payments for property taxes and homeowners insurance.
What does the Housing Act Require Lenders or Servicers To Do?
To protect consumers, the National Affordable Housing Act requires lenders or servicers to do the following.
Provide a disclosure statement.
The disclosure statement says whether the lender intends to sell the mortgage servicing immediately; whether the mortgage servicing can be sold at any time during the life of the loan; and the percentage of loans the lender has sold previously. During 1992, lenders must disclose the percentage of loans for which the servicing was sold in 1990 and 1991. This will change beginning in 1993, when lenders will have to report figures for the previous three years. The percentages will be noted in the ranges 0-25%, 26-50%, 51-75%, and 76-100%. The lender also must provide information about servicing procedures, transfer practices, and complaint resolution.
If you have a face-to-face interview with a lender, you must receive the disclosure statement at the time of the loan application. If you apply for a loan by mail, the lender has three business days to send you the disclosure statement after receiving your application. If you do not return a signed disclosure statement, the lender cannot fund a mortgage for you.
Give proper notification when the loan servicing is going to be sold
If your current servicer plans to sell your loan servicing, you must be notified at least 15 days before the effective date of the transfer unless you received a written transfer notice at settlement. The effective date is when the first mortgage payment is due at the new servicer's address. Under certain circumstances, the current servicer has up to 30 days after the effective date of the transfer to send you notification. These circumstances include:
* The lender terminates the contract because, for example, you have defaulted on the loan.
* The servicer files for bankruptcy.
* The Federal Deposit Insurance Corporation or the Resolution Trust Corporation begins proceedings to take over the servicer's operations.
Include certain information in the notice.
If your loan servicing is going to be sold, you should receive two notices-one from the current servicer and one from the new mortgage servicer. The new servicer must notify you not more than 15 days after the transfer has occurred. The notices must include the following information:
* the name and address of the new servicer.
* the date the current servicer will stop accepting mortgage payments, and the date the new servicer will begin accepting them.
* free or collect call telephone numbers for both the current servicer and the new servicer that you can call for information about the transfer of service.
* Information that tells whether you can continue any option insurance, such as mortgage life or disability insurance, and what action, if any, you must take to maintain coverage. You also must be told whether the insurance terms will change.
* A statement that the transfer will not affect any terms or conditions of the contract you signed with the original mortgage company, other than terms directly related to the servicing of such loan. For example, if your old lender did not require an escrow account, but allowed you to pay property taxes and insurance premiums on your own, the new servicer cannot demand that you establish such an account.
Grant a grace period during the transfer of the loan servicing.
After the transfer, there is a 60-day grace period. During this time you cannot be charged a late fee if you mistakenly send your mortgage payment to the old mortgage servicer instead of the new one. In addition, the fact that your new servicer may have received your payment late cannot be reported to a credit bureau.
Respond promptly to written inquiries.
If you believe you have been improperly charged a penalty or late fee, or there are other problems with the servicing of your loan, contact your servicer in writing. Be sure to include your account number and explain why you believe your account is incorrect.
Within 20 business days of receiving your inquiry, the servicer must send you a written response acknowledging your inquiry. Within 60 business days, the servicer must either correct your account or determine it is accurate. The servicer must send you a written notice of what action it took and why.
Do not subtract any disputed amount from your mortgage payment. Many mortgage servicers will refuse to accept what they consider to be partial payments. They may return the check and charge a late fee, or declare the mortgage is in default and start foreclosure proceedings.
Cranston Gonzales Act, 12 U.S.C. 2605
Obligations of Mortgage Servicers
What Can You Do If You Have a Complaint?
If you believe the servicer has not responded appropriately to your written inquiry, contact your local or state consumer protection office. If your lender is certified by the Department of Housing and Urban Development (HUD), you may want to file a complaint with HUD. Write: Office of Single Family Housing, HUD, Room 9282, Washington, D.C. 20410.
You also can send your complaint to the FTC. Write to: Correspondence B ranch, Federal Trade Commission, Washington, D.C. 20580. Although the FTC generally does not intervene in individual cases, the information you provide may indicate a pattern of possible law violations requiting action by the Commission.
You also may want to contact an attorney to advise you of your legal rights. Under the National Affordable Housing Act, consumers can initiate class action suits and obtain actual damages, plus additional damages, for a pattern or practice of noncompliance. In successful actions, consumers also may obtain court costs and attorneys fees.
FTC Headquarters
6th & Pennsylvania Avenue, N.W.
Washington, D.C. 20580
(202) 326-2222
TDD (202) 326-2502
FTC Regional Offices
1718 Peachtree Street, N.W., Suite 1000
Atlanta, Georgia 30367
(404) 347-4837
10 Causeway Street, Suite 1184
Boston, Massachusetts 02222-1073
(617) 565-7240
55 East Monroe Street, Suite 1437
Chicago, Illinois 60603
(312) 353-4423
668 Euclid Avenue, Suite 520-A
Cleveland, Ohio 44114
(216) 522-4207
100 N. Central Expressway, Suite 500
Dallas, Texas 75201
(214) 767-5501
1405 Curtis Street, Suite 2900
Denver, Colorado 80202-2393
(303) 844-2271
11000 Wilshire Boulevard, Suite 13209
Los Angeles, California 90024
(310) 575-7575
150 William Street, Suite 1300
New York, New York 10038
(212) 264-1207
901 Market Street, Suite 570
San Francisco, California 94103
(415) 744-7920
2806 Federal Bldg., 915 Second Ave.
Seattle, Washington 98174
(206) 553-4656
#2 Consumer Comment
Mortgage Servicing Fraud, Fees, Escrow and Forced Insurance
AUTHOR: Bill & Ted - (U.S.A.)
SUBMITTED: Friday, January 20, 2006
This may help
Mortgage Servicing Fraud, Fees, Escrow and Forced Insurance
Homes are being stolen, families degraded by unscrupulous servicing companies. A few cases have come to trial only to be settled with a miserable amount to the victims.
As a result of these settlements, e.g. Fairbanks, the records are sealed, victims have not received full restitution, and the end result victims are bound to silence.
The worst part is the company is allowed to continue its so-called amended practices.
This is a SLAP IN THE FACE for the American public. Why is there no justice for these victims of servicing fraud?
There is much more to be done. Legislation has been enacted for anti-predatory laws in various states. There is a greater issue that of Predatory Servicing and their fiduciary responsibilities.
Gone are the days when you would go to your local bank and get a mortgage for a new home and know that they would service and maintain your account. Instead they sell the servicing rights to others, companies such as Litton Loan Servicing, Ocwen Federal, EMC, and so many more.
Anyone remember the Household Finance Class action, still in business and many victims still devastated. Now they continue business with a parent company, named HSBC.
There is justice: A Legal Remedy
Can You Fire Your Mortgage Servicer?
Press here for more information.
Mortgage Servicing Rules
* Your current servicer usually must notify you at least 15 days before the effective date of the transfer of your loan servicing.
* During a 60-day grace period, you cannot be charged a late fee if you mistakenly send your mortgage payment to the old servicer
and
* The new servicer cannot report to a credit bureau that payments were late.
* Write to the servicer if you think there are any problems with your account.
* Within 60 business days of receiving your inquiry, the servicer must correct your account or determine it is accurate.
* Do not subtract any disputed amount from your mortgage payment. The servicer may consider this different amount to be a partial payment and declare the mortgage in default.
When you apply for a home mortgage, you may think that the lender, or loan originator, will service the loan until it is paid off or your house is sold. This is not always true. In today's market, mortgage servicing rights often are bought and sold.
If you are notified that your home mortgage servicing has been sold to another company, you may wonder how it will affect your loan terms and monthly payments. Some consumers have complained that they were not given enough notice of loan servicing transfers and were unfairly charged late fees and penalties.
In 1990, the National Affordable Housing Act was passed to address some of these concerns. This brochure explains what a mortgage servicer does and what your rights are under the Housing Act It also tells what you can do if you have a complaint about the transfer of your loan servicing.
What are the responsibilities of a Mortgage Servicer?
The mortgage servicer collects your monthly payments and handles your escrow account. An escrow account is a fund that your lender establishes in order to pay property taxes and hazard insurance as they become due on your home during the year. In this way, the lender uses the escrow account to guard its investment in your home.
When your escrow account is first established, your mortgage servicer must give you a statement telling you the estimated taxes, insurance premiums and other charges that are anticipated over the next 12 months and the expected totals of those payments.
The mortgage servicer also is required to give you an annual statement that details the activity of your escrow account. This statement shows your account balance and reflects payments for property taxes and homeowners insurance.
What does the Housing Act Require Lenders or Servicers To Do?
To protect consumers, the National Affordable Housing Act requires lenders or servicers to do the following.
Provide a disclosure statement.
The disclosure statement says whether the lender intends to sell the mortgage servicing immediately; whether the mortgage servicing can be sold at any time during the life of the loan; and the percentage of loans the lender has sold previously. During 1992, lenders must disclose the percentage of loans for which the servicing was sold in 1990 and 1991. This will change beginning in 1993, when lenders will have to report figures for the previous three years. The percentages will be noted in the ranges 0-25%, 26-50%, 51-75%, and 76-100%. The lender also must provide information about servicing procedures, transfer practices, and complaint resolution.
If you have a face-to-face interview with a lender, you must receive the disclosure statement at the time of the loan application. If you apply for a loan by mail, the lender has three business days to send you the disclosure statement after receiving your application. If you do not return a signed disclosure statement, the lender cannot fund a mortgage for you.
Give proper notification when the loan servicing is going to be sold
If your current servicer plans to sell your loan servicing, you must be notified at least 15 days before the effective date of the transfer unless you received a written transfer notice at settlement. The effective date is when the first mortgage payment is due at the new servicer's address. Under certain circumstances, the current servicer has up to 30 days after the effective date of the transfer to send you notification. These circumstances include:
* The lender terminates the contract because, for example, you have defaulted on the loan.
* The servicer files for bankruptcy.
* The Federal Deposit Insurance Corporation or the Resolution Trust Corporation begins proceedings to take over the servicer's operations.
Include certain information in the notice.
If your loan servicing is going to be sold, you should receive two notices-one from the current servicer and one from the new mortgage servicer. The new servicer must notify you not more than 15 days after the transfer has occurred. The notices must include the following information:
* the name and address of the new servicer.
* the date the current servicer will stop accepting mortgage payments, and the date the new servicer will begin accepting them.
* free or collect call telephone numbers for both the current servicer and the new servicer that you can call for information about the transfer of service.
* Information that tells whether you can continue any option insurance, such as mortgage life or disability insurance, and what action, if any, you must take to maintain coverage. You also must be told whether the insurance terms will change.
* A statement that the transfer will not affect any terms or conditions of the contract you signed with the original mortgage company, other than terms directly related to the servicing of such loan. For example, if your old lender did not require an escrow account, but allowed you to pay property taxes and insurance premiums on your own, the new servicer cannot demand that you establish such an account.
Grant a grace period during the transfer of the loan servicing.
After the transfer, there is a 60-day grace period. During this time you cannot be charged a late fee if you mistakenly send your mortgage payment to the old mortgage servicer instead of the new one. In addition, the fact that your new servicer may have received your payment late cannot be reported to a credit bureau.
Respond promptly to written inquiries.
If you believe you have been improperly charged a penalty or late fee, or there are other problems with the servicing of your loan, contact your servicer in writing. Be sure to include your account number and explain why you believe your account is incorrect.
Within 20 business days of receiving your inquiry, the servicer must send you a written response acknowledging your inquiry. Within 60 business days, the servicer must either correct your account or determine it is accurate. The servicer must send you a written notice of what action it took and why.
Do not subtract any disputed amount from your mortgage payment. Many mortgage servicers will refuse to accept what they consider to be partial payments. They may return the check and charge a late fee, or declare the mortgage is in default and start foreclosure proceedings.
Cranston Gonzales Act, 12 U.S.C. 2605
Obligations of Mortgage Servicers
What Can You Do If You Have a Complaint?
If you believe the servicer has not responded appropriately to your written inquiry, contact your local or state consumer protection office. If your lender is certified by the Department of Housing and Urban Development (HUD), you may want to file a complaint with HUD. Write: Office of Single Family Housing, HUD, Room 9282, Washington, D.C. 20410.
You also can send your complaint to the FTC. Write to: Correspondence B ranch, Federal Trade Commission, Washington, D.C. 20580. Although the FTC generally does not intervene in individual cases, the information you provide may indicate a pattern of possible law violations requiting action by the Commission.
You also may want to contact an attorney to advise you of your legal rights. Under the National Affordable Housing Act, consumers can initiate class action suits and obtain actual damages, plus additional damages, for a pattern or practice of noncompliance. In successful actions, consumers also may obtain court costs and attorneys fees.
FTC Headquarters
6th & Pennsylvania Avenue, N.W.
Washington, D.C. 20580
(202) 326-2222
TDD (202) 326-2502
FTC Regional Offices
1718 Peachtree Street, N.W., Suite 1000
Atlanta, Georgia 30367
(404) 347-4837
10 Causeway Street, Suite 1184
Boston, Massachusetts 02222-1073
(617) 565-7240
55 East Monroe Street, Suite 1437
Chicago, Illinois 60603
(312) 353-4423
668 Euclid Avenue, Suite 520-A
Cleveland, Ohio 44114
(216) 522-4207
100 N. Central Expressway, Suite 500
Dallas, Texas 75201
(214) 767-5501
1405 Curtis Street, Suite 2900
Denver, Colorado 80202-2393
(303) 844-2271
11000 Wilshire Boulevard, Suite 13209
Los Angeles, California 90024
(310) 575-7575
150 William Street, Suite 1300
New York, New York 10038
(212) 264-1207
901 Market Street, Suite 570
San Francisco, California 94103
(415) 744-7920
2806 Federal Bldg., 915 Second Ave.
Seattle, Washington 98174
(206) 553-4656
#1 Consumer Comment
Mortgage Servicing Fraud, Fees, Escrow and Forced Insurance
AUTHOR: Bill & Ted - (U.S.A.)
SUBMITTED: Friday, January 20, 2006
This may help
Mortgage Servicing Fraud, Fees, Escrow and Forced Insurance
Homes are being stolen, families degraded by unscrupulous servicing companies. A few cases have come to trial only to be settled with a miserable amount to the victims.
As a result of these settlements, e.g. Fairbanks, the records are sealed, victims have not received full restitution, and the end result victims are bound to silence.
The worst part is the company is allowed to continue its so-called amended practices.
This is a SLAP IN THE FACE for the American public. Why is there no justice for these victims of servicing fraud?
There is much more to be done. Legislation has been enacted for anti-predatory laws in various states. There is a greater issue that of Predatory Servicing and their fiduciary responsibilities.
Gone are the days when you would go to your local bank and get a mortgage for a new home and know that they would service and maintain your account. Instead they sell the servicing rights to others, companies such as Litton Loan Servicing, Ocwen Federal, EMC, and so many more.
Anyone remember the Household Finance Class action, still in business and many victims still devastated. Now they continue business with a parent company, named HSBC.
There is justice: A Legal Remedy
Can You Fire Your Mortgage Servicer?
Press here for more information.
Mortgage Servicing Rules
* Your current servicer usually must notify you at least 15 days before the effective date of the transfer of your loan servicing.
* During a 60-day grace period, you cannot be charged a late fee if you mistakenly send your mortgage payment to the old servicer
and
* The new servicer cannot report to a credit bureau that payments were late.
* Write to the servicer if you think there are any problems with your account.
* Within 60 business days of receiving your inquiry, the servicer must correct your account or determine it is accurate.
* Do not subtract any disputed amount from your mortgage payment. The servicer may consider this different amount to be a partial payment and declare the mortgage in default.
When you apply for a home mortgage, you may think that the lender, or loan originator, will service the loan until it is paid off or your house is sold. This is not always true. In today's market, mortgage servicing rights often are bought and sold.
If you are notified that your home mortgage servicing has been sold to another company, you may wonder how it will affect your loan terms and monthly payments. Some consumers have complained that they were not given enough notice of loan servicing transfers and were unfairly charged late fees and penalties.
In 1990, the National Affordable Housing Act was passed to address some of these concerns. This brochure explains what a mortgage servicer does and what your rights are under the Housing Act It also tells what you can do if you have a complaint about the transfer of your loan servicing.
What are the responsibilities of a Mortgage Servicer?
The mortgage servicer collects your monthly payments and handles your escrow account. An escrow account is a fund that your lender establishes in order to pay property taxes and hazard insurance as they become due on your home during the year. In this way, the lender uses the escrow account to guard its investment in your home.
When your escrow account is first established, your mortgage servicer must give you a statement telling you the estimated taxes, insurance premiums and other charges that are anticipated over the next 12 months and the expected totals of those payments.
The mortgage servicer also is required to give you an annual statement that details the activity of your escrow account. This statement shows your account balance and reflects payments for property taxes and homeowners insurance.
What does the Housing Act Require Lenders or Servicers To Do?
To protect consumers, the National Affordable Housing Act requires lenders or servicers to do the following.
Provide a disclosure statement.
The disclosure statement says whether the lender intends to sell the mortgage servicing immediately; whether the mortgage servicing can be sold at any time during the life of the loan; and the percentage of loans the lender has sold previously. During 1992, lenders must disclose the percentage of loans for which the servicing was sold in 1990 and 1991. This will change beginning in 1993, when lenders will have to report figures for the previous three years. The percentages will be noted in the ranges 0-25%, 26-50%, 51-75%, and 76-100%. The lender also must provide information about servicing procedures, transfer practices, and complaint resolution.
If you have a face-to-face interview with a lender, you must receive the disclosure statement at the time of the loan application. If you apply for a loan by mail, the lender has three business days to send you the disclosure statement after receiving your application. If you do not return a signed disclosure statement, the lender cannot fund a mortgage for you.
Give proper notification when the loan servicing is going to be sold
If your current servicer plans to sell your loan servicing, you must be notified at least 15 days before the effective date of the transfer unless you received a written transfer notice at settlement. The effective date is when the first mortgage payment is due at the new servicer's address. Under certain circumstances, the current servicer has up to 30 days after the effective date of the transfer to send you notification. These circumstances include:
* The lender terminates the contract because, for example, you have defaulted on the loan.
* The servicer files for bankruptcy.
* The Federal Deposit Insurance Corporation or the Resolution Trust Corporation begins proceedings to take over the servicer's operations.
Include certain information in the notice.
If your loan servicing is going to be sold, you should receive two notices-one from the current servicer and one from the new mortgage servicer. The new servicer must notify you not more than 15 days after the transfer has occurred. The notices must include the following information:
* the name and address of the new servicer.
* the date the current servicer will stop accepting mortgage payments, and the date the new servicer will begin accepting them.
* free or collect call telephone numbers for both the current servicer and the new servicer that you can call for information about the transfer of service.
* Information that tells whether you can continue any option insurance, such as mortgage life or disability insurance, and what action, if any, you must take to maintain coverage. You also must be told whether the insurance terms will change.
* A statement that the transfer will not affect any terms or conditions of the contract you signed with the original mortgage company, other than terms directly related to the servicing of such loan. For example, if your old lender did not require an escrow account, but allowed you to pay property taxes and insurance premiums on your own, the new servicer cannot demand that you establish such an account.
Grant a grace period during the transfer of the loan servicing.
After the transfer, there is a 60-day grace period. During this time you cannot be charged a late fee if you mistakenly send your mortgage payment to the old mortgage servicer instead of the new one. In addition, the fact that your new servicer may have received your payment late cannot be reported to a credit bureau.
Respond promptly to written inquiries.
If you believe you have been improperly charged a penalty or late fee, or there are other problems with the servicing of your loan, contact your servicer in writing. Be sure to include your account number and explain why you believe your account is incorrect.
Within 20 business days of receiving your inquiry, the servicer must send you a written response acknowledging your inquiry. Within 60 business days, the servicer must either correct your account or determine it is accurate. The servicer must send you a written notice of what action it took and why.
Do not subtract any disputed amount from your mortgage payment. Many mortgage servicers will refuse to accept what they consider to be partial payments. They may return the check and charge a late fee, or declare the mortgage is in default and start foreclosure proceedings.
Cranston Gonzales Act, 12 U.S.C. 2605
Obligations of Mortgage Servicers
What Can You Do If You Have a Complaint?
If you believe the servicer has not responded appropriately to your written inquiry, contact your local or state consumer protection office. If your lender is certified by the Department of Housing and Urban Development (HUD), you may want to file a complaint with HUD. Write: Office of Single Family Housing, HUD, Room 9282, Washington, D.C. 20410.
You also can send your complaint to the FTC. Write to: Correspondence B ranch, Federal Trade Commission, Washington, D.C. 20580. Although the FTC generally does not intervene in individual cases, the information you provide may indicate a pattern of possible law violations requiting action by the Commission.
You also may want to contact an attorney to advise you of your legal rights. Under the National Affordable Housing Act, consumers can initiate class action suits and obtain actual damages, plus additional damages, for a pattern or practice of noncompliance. In successful actions, consumers also may obtain court costs and attorneys fees.
FTC Headquarters
6th & Pennsylvania Avenue, N.W.
Washington, D.C. 20580
(202) 326-2222
TDD (202) 326-2502
FTC Regional Offices
1718 Peachtree Street, N.W., Suite 1000
Atlanta, Georgia 30367
(404) 347-4837
10 Causeway Street, Suite 1184
Boston, Massachusetts 02222-1073
(617) 565-7240
55 East Monroe Street, Suite 1437
Chicago, Illinois 60603
(312) 353-4423
668 Euclid Avenue, Suite 520-A
Cleveland, Ohio 44114
(216) 522-4207
100 N. Central Expressway, Suite 500
Dallas, Texas 75201
(214) 767-5501
1405 Curtis Street, Suite 2900
Denver, Colorado 80202-2393
(303) 844-2271
11000 Wilshire Boulevard, Suite 13209
Los Angeles, California 90024
(310) 575-7575
150 William Street, Suite 1300
New York, New York 10038
(212) 264-1207
901 Market Street, Suite 570
San Francisco, California 94103
(415) 744-7920
2806 Federal Bldg., 915 Second Ave.
Seattle, Washington 98174
(206) 553-4656
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