Report: Litton Loan Servicing, Fairbanks, Temple Inland Mortgage, OCWEN, Wells Fargo, Option One, Homeside
Category: Mortgage Companies
Litton Loan Servicing, Fairbanks, Temple Inland Mortgage, OCWEN, Wells Fargo, Option One, Homeside, Countrywide, but ALL Predatory Lenders FRAUD! ripoff End result to the consumer - FORECLOSURE. Nationwide
*Consumer Comment ..The Loan Mortgage Scandle
Rebuttal Box
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Are you an owner, employee or ex-employee with either negative or positive information about the company or individual, or can you provide "insider information" on this company? Victim of this person/company?
Are you also a victim of the same company or individual? Want Justice? File a Rip-off Report, help other consumers to be educated and don´t let them get away with it!
Litton Loan Servicing, Fairbanks, Temple Inland Mortgage, OCWEN, Wells Fargo, Option One, Homeside
Fax:
Houston, Texas,
U.S.A.
Submitted: 8/19/2003 1:57:35 PM
Modified: 10/25/2007 8:06:34 PM
A
Akron, OhioThis is not just about Litton Loan Servicing, it's about
the criminal business actions of the majority of the lending companies today. Litton Loan Servicing, Fairbanks, Temple Inland Mortgage, OCWEN, Wells Fargo, Option One, Homeside, Countrywide, I could go on for days listing company names. They are ALL alike in
their business transactions. End result to the
consumer - FORECLOSURE.
Come on FEDS WAKE UP! Who will be the first to bring these giants down? This is happening right under the noses of our own government! Is there no one on the take here? If I can find the needle in a haystack(one HONEST politician) who will be brave enough to take a
stand and know when ENOUGH IS ENOUGH!
Hardworking Americans are being forced into the foreclosure. The American Dream is being stolen away from the average Joe working class by big money
conglomorates that feed off of unsuspecting tax payers.
This FRAUD MUST end!
Ann
A
Akron, Ohio
U.S.A.
Click here to read other Rip Off Reports on Fairbanks Capital Corp
Click here to read other Rip Off Reports on OCWEN Federal Bank Financial Services
Click here to read other Rip Off Reports on HomeSide Lending
Click here to read other Rip Off Reports on Wells Fargo Bank
Click here to read other Rip Off Reports on Option One
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Updates & Rebuttals:
- A few politicians to write... David [8/20/2003 2:15:25 AM]
- JUST A FEW DAYS BEFORE THEIR FRAUDULANT FORECLOSURE FINALE BEGINS L. [9/10/2003 1:13:33 PM]
- Sen. Sarbanes & Sen. Mikulski vs. Predatory Lending Marilyn [12/13/2005 7:35:58 PM]
- Mortgage Servicing Companies Shari [1/5/2006 9:43:46 AM]
- Take some responsibility. Robert [1/5/2006 12:38:36 PM]
- If You Have A Mortgage... Mira [1/5/2006 6:47:16 PM]
- 'Mortgage Servicing Companies Don't Make Money On Forclosures' ..noronic statement Jon [1/5/2006 7:51:10 PM]
- Avoid Option One V [1/6/2006 12:53:19 AM]
- Facts? How about common sense? Robert [1/6/2006 11:25:20 AM]
- Still no facts shown here! Robert [1/7/2006 10:23:46 AM]
- Predatory Mortgage Holders Jennifer [1/7/2006 1:44:01 PM]
- ROBERT, PLEASE READ! Kyndall [1/7/2006 5:23:59 PM]
- Not the same thing! Robert [1/9/2006 9:01:39 AM]
- Robert I believe you have misunderstood what is being said in some cases Jon [1/9/2006 4:26:22 PM]
- Hit the nail on the head! Robert [1/10/2006 9:12:58 AM]
- Predatory Lending and Foreclosures Cheryl [1/10/2006 12:25:03 PM]
- Boycotting the Real Estate Market Cheryl [1/11/2006 11:31:26 AM]
- Let's Be Realistic. anybody who thinks companies make money on foreclosures is crazy Jason [1/17/2006 9:50:09 PM]
- Jason. Jason, Jason! you have absolutely no common sense Jon [1/18/2006 8:23:58 PM]
- Jon. Jon, Jon! - Nobody is denying that there are shady actions being done in the industry Jason [1/21/2006 7:26:50 PM]
- Jason, you are missing a very important fact here! Jon [1/21/2006 11:57:43 PM]
- FORECLOSURES MUST BE PROFITABLE /IF NOT WHY ARE THERE SO MANY WRONGFUL FORECLOSURES Marilyn [1/23/2006 5:48:55 PM]
- Don't blame the consumer, blame Ocwen. Ocwen is a bad business with no ethics. Sara [1/23/2006 11:08:24 PM]
- OCWEN TRANSFERRED MY LOAN TO LITTON THAT STARTED THE NIGHTMARE! Marilyn [1/24/2006 11:58:07 AM]
- Failure to Abide by Best Practices is no big deal - - Wake up. There is fraud at every turn in the mortgage industry and it is not all about slimey borrowers. Delores [4/9/2006 2:38:02 PM]
- Robert is correct Susan [11/13/2006 6:50:12 PM]
- Poor Mindless Susan Jon [11/14/2006 7:04:59 PM]
- I don't understand. Albert [12/13/2006 6:47:12 PM]
- Re Foreclosures (Ocwen Bank et al etc) S [1/23/2007 6:17:44 AM]
- Susan - Dallas, Texas S [1/23/2007 6:28:00 AM]
- Loan Servicing companies need to be responsible too!!! Anonymous [3/10/2007 3:37:42 AM]
- A comment about Lenders making money off of your loan long term Anonymous [3/10/2007 3:55:33 AM]
- Is a savings idealistic??? Anonymous [3/10/2007 4:12:27 AM]
- proposal for Robert and Susan William [4/10/2007 7:36:50 PM]
- About a Sherryl Hawkins Christine [10/16/2007 6:59:33 AM]
- Houses in Harrisburg Christine [10/16/2007 7:44:11 AM]
- The Loan Mortgage Scandle Dru [10/25/2007 3:15:47 PM]
A few politicians to write...
Sen. Barbara Mikulski (D-Maryland) and Sen. Paul Sarbanes (D-Maryland) are well aware of predatory lending and servicing problems with Fairbanks Capital Corp. and have demanded HUD investigate, and it has begun to do so. I would avoid one of the congressmen from Ohio, Rep. Bob Ney (R-18th Dist. Ohio) corporate tool and one of the ranking members of the House Banking committee, or maybe send him hate mail, because he's introduced legislation which would preempt strict local predatory lending laws nationwide and creates all sorts of loopholes for lenders to escape liability. No surprise since most of his campaign contributions come from the consumer finance and mortgage industries.
In any event, I think everyone having a problem with these companies should write both Sens. Mikulski and Sarbanes and make them aware this problem is not limited to one company. Write your local senators and congressperson as well and explain what their rubberstamping of corporate and PAC campaign contribution-laden legislation has done to you and your family. If they don't respond or seem to care, vote them out; elections are coming up soon.
JUST A FEW DAYS BEFORE THEIR FRAUDULANT FORECLOSURE FINALE BEGINS
Last December 2002.....I barely got out of the fraudulent ripped off of Well's Fargo's foreclosure. Little did I realize I would be back in that same hell hole AGAIN!!
Well's Fargo are starting it again, as of Sept. 13.2003.
Would you believe that for the past 6 years I have not ever received a payment history from them. Even after written request.Wether in good/bad standing with them.
How does one get their RIGHTS back?
Hell is this BS. My faith is drained! There is NO LAW! There is NO JUSTICE! There is no CONSTITUTIONAL RIGHTS!
Wells Fargo has all the support that they have invested for. My so-called JUDGE'S CAMPAIGN CONTRIBUTION'S-Show's it publicly. Not only this fraud of an EQUITY LOAN With no live person for customer help/complaints.Just a ring a round the Hosien of a 800 number.
The Wells Fargo's Customer Service 800 number is a FREAKING JOKE! Every Friday it has the same number....but the title to that extension changes too frequently.
Last Friday, I spoke with a Well's Fargo Phone tagger as of the name of ' SUKKI'..after politely asking her why I still have never once received payment records before 1997..the loan was taken out originally in 1987 for the amount of $150,000.00. Knowing they have changed this equity loan account number 3 different times....The newest and lamest of their lies was again given to me by her as....
Sukkii's answer was:
'Well, looking at my computer's records, I'm sorry, but there is NO INFORMATION REGARDING THIS LOAN BEFORE 1998.'
I responded saying this...'Now Sukkii, you mean to tell me that Well's Fargo has no record of this account before 1998, like it does not exist?
Sukkii..responded ' yes, that is what my computer is showing'
I responded as 'well then that means this loan does not exist? Or the loan has already been paid off?
She responded very rudely..telling me I better pay the total needed to get this loan / house out of default'.I need to hurry and refinance it.
I asked how do I do these, since the loan was deliberately (by my then, legal crooks) left in my deceased father's name? Especially, right before this legal crook goes on a last minute trip to Sweden..just to die?
She told me that I could refinance it, even in my deceased father's name, since I am the administrator of this estate.
At the conclusion of this conversation, I realized more then ever, that there is so much crookedness and greed and fraud with the courts/judges/lawyers/banks/title companies.
Maybe these groups of FRAUDULENT political and commercial members of fraud and their 'paid for/pay off' gain their main support through a higher source and MAIN office? That might be why I got my e/mails blocked from the Senator? She sounded so human at first. Then to respond to me so kindly/personal just to deny my e/mail/response/rights?
If people would get out of denial and open their eyes to this fraud of our so-called system, or so-called lenders, or so-called politicians/leaders! Then maybe this BS will begin to slow down and hopefully end.
Or will it have to be to the point of them stealing your properties too?
It surely is a mess I'd love to trade with anyone!
Why do these people continue in their frenzy way?
BECAUSE THEY CONTINUE TO GET AWAY WITH IT!!
WHY?
BECAUSE PEOPLE RATHER TURN THEIR OTHER CHEEK!!
You just might be their next victim? Are you ready? Are you prepared?
Hopefully no other human has to succumb and suffer with their targeted cruelty!!!!!!
Sen. Sarbanes & Sen. Mikulski vs. Predatory Lending
I lived in Maryland and have contacted both Senator Sarbanes & Senator Mikulski concerning predatory lending legislation. The consumer is absoultely right that both have done extensive work on predatory lending. Senator Sarbanes has had a bill in the senate for several years. His Senate Bill 1928, the 'Predatory Lending Consumer Protection Act 2003' has been held up by Repulicans and a few Deomocrats have not given him support to pass his bill, Click On:
http://www.prweb.com/releases/2005/11/prweb312926.php
Senator Mikulski worked with President Clinton and former Secretary Cuomo of HUD and The Treasury Department to form a Task Force to combat predatory lending, specifically here in Baltimore, Maryland. I have contacted her office and sent a letter of complaint about Litton Loan Servicer regarding wrongful foreclosures and mortgage foreclosure fraud. Her assistant, Ben said he would get back to me. If I hear anything, I will let you know.
Senator Sarbanes office is the only one so far that has been helpful. His office forward my complaint to the 'OCC' concerning U S Bank, NA since they are the trustee bank for Litton Loan Servicer, LP. My loan had been with OCWEN before being transferred or sold to Litton. When I receive a response, I will post it on the website.
Take Care!
Mortgage Servicing Companies
Some of the companies mentioned above are NOT the actual lender, but a mortgage servicing company, (i.e. Litton Loan Servicing out of Houston, Tx.)
President Bush is pushing for every American to become a home owner, yet many Americans are losing their jobs everyday because our big corporations are moving out of the Country or closing their doors.
I got into a situatiaon with Chase Home Mortgage after having lost my job, entered into a Forbearance Agreement, paid them $3,000 and their Tulsa, Oklahoma attorneys still filed foreclosure. Even after I told them I would not make another payment until the foreclosure was dismissed, they did nothing. I have been in foreclosure for 2 years. Most of their Litigation Officers/Loss Mitigation Officers doe NOT comply with the Federal Collections Procedures Act.
Check your loan documents. Were you given a good faith estimate and a truth in lending form within 72 hours of making loan application. If not (and a lot of loan originators do not follow the law), then you can counter sue for RESPA and TILA violations and ask the court to make the mortgage company pay for your house.
RESPA = Real Estate Settlement Procedures Act
TILA = Truth in Lending
Tulsa, Oklahoma
Take some responsibility.
Come on people, the majority of complaints on this website regarding mortgage companies are not valid. People make your payments on time and you will have no worries. Obviously there are going to be mistakes here and there, but most of these posts start out a little something like this... 'I called the ABC company when I filed for bankruptcy and hadn't made a payment in 4 months, I've been ripped off because they want to take my house'.
At what point do we as adults take some responsibility for our actions. Most of you complaining should look in the mirror before writing a complaint on a public forum.
I am truly sorry that bad things happen to good people, but the fact is your mortgage company is there to make money and if you don't pay then they need their collateral back. It is well know a mortgage company does not and cannot make money by foreclosing on your house.
If You Have A Mortgage...
you need to be aware of what is going on within the mortgage industry. Do a simple internet search with the words mortgage servicing fraud.
Robert, do you work in the mortgage industry? If so, please enlighten us as to how you came to the conclusion that it is well known that money isn't being made by a foreclosure.
Where are your facts?
I will not wait for your response.
The FTC, the OTC, the SEC, etc., have and ARE investigating this fraud.
MANY mortgage servicing companies, and banks have been SHUT DOWN due to this fraud.
Temple-Inland, Guaranty Bank received a CEASE AND DESIST order.
Ocwen just got SLAMMED with a HUGE lawsuit (JURY TRIAL) for STEALING a woman's home.
If you really believe in what you are saying Robert, I'm sure that someone out there has swamp land that they would like to sell you.
'Mortgage Servicing Companies Don't Make Money On Forclosures' ..noronic statement
Robert,
You should be ashamed of yourself. After all your noronic statement (above) is absolute BULLSH$T!
Information disclosed during a recent case that was litigated in TX against Ocwen where the jury awarded the plaintiff 11.5 Million: At trial, a former Ocwen employee testified to the company's unfair practices, including paying incentives to its loan collectors for moving properties with equity into foreclosure.
Evidence also showed that the company engaged in predatory servicing by not informing borrowers of how to make their loans current and failing to give credit for payments when they were made.
We have always known that Ocwen was after the equity...but I had no idea that incentives were being offered to steal it. This puts Ocwen on a whole new level, but I cannot find a description of anything that low except the devil in his hellish kingdom.
Florida Bank Hit With $11.5 Million Verdict; Galveston Jury Says Ocwen Federal Bank FORCED Woman Into Bankruptcy
GALVESTON, Texas, Nov. 29 /PRNewswire/ -- A Galveston County jury has awarded a Texas City woman $11.5 million after finding that West Palm Beach, Fla.-based Ocwen Federal Bank engaged in a scheme of unfair, unlawful and deceptive business practices in its servicing of her home equity loan.
The jury verdict, handed down in Judge Susan Criss' 212th District Courton Nov. 29, followed eight days of trial and two days of deliberation in Sealy Davis v. Ocwen Federal Bank, et al.
In February 2002, Ms. Davis, 64, took out a $31,000 home equity loan on the Texas City residence where she had lived since 1942. Ocwen acted as the servicing agent on the loan.
In 2003, Ms. Davis became ill and spent four days in the hospital, which forced her to miss one loan payment. Ocwen told her it would put her on a payment plan, but never did. Ocwen also failed to credit Ms. Davis for the money she paid, and began to foreclose on her house while continuing to assure her she was on a payment plan.
Ocwen eventually foreclosed on Ms. Davis' home, and she filed for Chapter 13 bankruptcy in the hopes of ending Ocwen's harassment. During the
bankruptcy, however, Ocwen requested an additional $390 to cover its costs and
fees related to the default she already cured.
'We're pleased the jury decided that Ocwen should be held liable for what it did to Ms. Davis,' said attorney Robert Hilliard, lead counsel for Ms. Davis and name partner in Corpus Christi's Hilliard & Munoz, L.L.P. 'Home loan companies should help people own a place to live, but Ocwen apparently is more interested in taking away the homes of its customers.'
In a 10-2 vote, the jury found that Ocwen knowingly and intentionally deceived Ms. Davis, and awarded her $10 million in punitive damages and $1.15 million in attorneys fees.
Avoid Option One
I had a mortgage thru Option One several years ago, and since I got paid twice a month, made sure the loan papers said, 'due on the first, paybable by the 15th of the month' since I did not always get paid on the first, sometimes, it was not until the 13th or 14th, so that phrase was always a concern to me.
Well, my first payment was due on I think October 1, and around Sept 27th or so, I get a phone call at work from Option One saying they don't have my payment yet, am I in trouble or have I sent it already? I said, no, I have not sent it, as it is not due until the 1st, payable by the 15th and I get paid on the 8th this month, so will pay it by then, well then they threats started, you pay it by the first OR ELSE etc etc, and they continued to harass me at work and at home for YEARS afterwards, saying that 'payable by the 15th' was not a legal item (for lack of a better word on my part) and they could IMMEDIATELY foreclose on me if they did not get my payments by the 1st of each month (then why was it in the loan contract??).
Needless to say, this caused GREAT mental/physical stress on me continually the entire couple years I had them for a mortgage company with those daily, sometimes several times daily harassing calls to my workplace and home. These strong arm practices should NOT be allowed. I did call another local bank and ask then about the 'payable/due by' clause, and the loan officer said technically Option One was correct, but NO ONE that was above board in his industry would EVER threaten people by foreclosure or harass them by phone continually for weeks if they paid their payment by the 15th as stated by the loan contract!!
So, I would say avoid them at all costs,they were then part of H & R Block at that time, not sure if they are still, but I have avoided and talked friends out of using H & R Block also since then.
Facts? How about common sense?
Yes I do work in the mortgage industry and the fact is I am tired of hearing about people that do not make their payments then say ' they are trying to take my house because it has so much equity in it'. A mortgage company can only recover the balance of the mortgage plus their costs to go through a foreclosure which is very expensive for the company, any monies left over from the sale of the house go to the customer.
Let me put it this way, if they made so much money on foreclosures then why is it the last step for these companies? Why would they bother to offer payment plans to get the homeowner caught up? Wouldn't they just sit there and wait for the homeowner to default and go get their house, especially with where the market has been the last 5 years?
I never said that mortgage companies don't break the rules or commit fraud, they most certainly do just look at Ameriquest. They are one of the largest lenders in the country and they are about to be no more because of their fraudulent practices.
All I am saying is that banks are not out to take homes away, there is much more money in having the homeowner pay their mortgage on time. Wouldn't you think they would rather have you paying them interest over the next 30 years? Have you ever looked at a truth and lending statement, just go to the box on the far left and it will show the amount of money the company is going to make over the next 30 years. I promise it's going to be a lot more than the few thousand they would make on a foreclosure.
Still no facts shown here!
Jon, At what point did I say that these companies don't do illegal things? The fact still remains that if it was profitable for them to foreclose on people you would see it on every person that has gone late on their mortgage. By the way are you in the industry? I deal with this on a daily basis and talk to creditors that do everything they can to avoid foreclosure. Are there a few bad apples out there? Of course there are. But by you showing just a few isolated cases does not prove a thing. By the way, predatory lending which is over used on this forum has nothing to do with foreclosure. Predatory lending is a whole separate issue, but back to the issue at hand. I deal with foreclosures on a daily basis and have to deal with these companies so I know the crap they pull but the fact remains that majority of the time they do not want to foreclose. Of course I am speaking in generalities but if I didn't make that clear then I apologize. Anyone can sit on a computer and find court cases for any topic showing that a company did something wrong, let's look at the bigger picture here Jon.
Also, I would say 90% of the time the home owner is to blame for the foreclosure, I was just stating for people to take responsibility for their actions and stop trying to pass the buck.
Predatory Mortgage Holders
Rent, don't buy a house. Boycott buying property. Problem solved. Landlord has to make repairs and are easier to deal with than these sharks. If everybody stopped buying houses, the mortgage would have to change as a matter of course as there would be no value or money to be made. Simple solution.
Submitted: 1/7/2006 5:23:59 PM
Modified: 1/7/2006 5:23:59 PM
Kyndall
Gastonia, North CarolinaU.S.A.
ROBERT, PLEASE READ!
Robert,
Please read the information I have provide from the FBI website. Ocwen may not make money on forclosing on properties I think that is the way you put it however they do make money on flipping properties. Inflating appraisals!!!!
Congressional Testimony
Statement of
Chris Swecker
Assistant Director
Criminal Investigative Division
Federal Bureau of Investigation
Before the
House Financial Services
Subcommittee on Housing and Community Opportunity
October 7, 2004
Introductory Statement:
Good morning Mr. Chairman and Members of the subcommittee. I want to thank you for the opportunity to testify before you today about the FBI's efforts in combating mortgage fraud. Although there is no specific statute that defines mortgage fraud, each mortgage fraud scheme contains some type of 'material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan.' The Mortgage Bankers Association (MBA) projects $2.5 trillion in mortgage loans will be made this year. The FBI compiles data on mortgage fraud through Suspicious Activity Reports (SARs) filed by financial institutions, and Department of Housing and Urban Development Office of Inspector General (HUD-OIG) reports. The FBI also receives complaints from the industry at large.
A significant portion of the mortgage industry is void of any mandatory fraud reporting. In addition, mortgage fraud in the secondary market is often under reported. Therefore, the true level of mortgage fraud is largely unknown. The mortgage industry itself does not provide estimates on total industry fraud. The industry provides incomplete or inconsistent fraud data. Based on various industry reports and FBI analysis, mortgage fraud is pervasive and growing.
The FBI investigates mortgage fraud in two distinct areas: Fraud for Housing and Fraud for Profit. Fraud for Profit is sometimes referred to as 'Industry Insider Fraud' and the motive is to remove equity, falsely inflate the value of the property or issue loans based on fictitious property(ies). Based upon existing investigations and mortgage fraud reporting, 80% of all reported fraud losses involve collaboration or collusion by industry insiders. These schemes involve industry insiders to override lender controls. Fraud for Housing represents illegal actions perpetrated solely by the borrower. The simple motive behind this fraud is to acquire and maintain ownership of a house under false pretenses. This type of fraud is typified by a borrower who makes misrepresentations regarding his income or employment history to qualify for a loan.
For the past 18 months, the FBI has been evaluating the effectiveness of its national mortgage fraud program. In June 2004, I authorized the consolidation of the mortgage fraud program into the Financial Crimes Section of the FBI's Criminal Investigative Division. Previously, mortgage fraud that impacted government programs (i.e.HUD) was managed by the Integrity in Government Section. Mortgage fraud affecting financial institutions was managed by the Financial Crimes Section. This consolidation provides the FBI a more effective and efficient management over mortgage fraud investigations.
Second, I encouraged an overall strategy to addresses mortgage fraud on a proactive basis utilizing partnerships with federal agencies, state and local law enforcement, regulatory bodies, and private industry. Third, I assured adequate personnel resources were dedicated to emerging mortgage fraud problems in regions of the country encountering the greatest levels of fraud. And finally, the FBI adopted an overall strategy to focus on insiders harming the industry in order to disrupt and dismantle entire criminal enterprises.
The FBI defines industry insiders as appraisers, accountants, attorneys, real estate brokers, mortgage underwriters and processors, settlement/title company employees, mortgage brokers, loan originators and other mortgage professionals engaged in the mortgage industry. Through a mandatory reporting mechanism, industry insiders would be the front line in preventing mortgage fraud. Zero tolerance within the industry combined with a mandatory system of reporting fraudulent activities to the FBI and HUD will be a major step in addressing mortgage fraud.
The defrauding of mortgage lenders should not be compared to predatory lending practices which primarily affect borrowers. Predatory lending typically affects senior citizens, lower income and challenged credit borrowers. Predatory lending forces borrowers to pay exorbitant loan origination/settlement fees, sub prime or higher interest rates, and in some cases, unreasonable servicing fees. These practices often result in the borrower defaulting on his mortgage payment and undergoing foreclosure or forced refinancing. As one example, in 2002 and 2003, FBI, HUD-OIG and state and local agencies from Utah pursued allegations that Fairbanks Capital Corporation was engaged in predatory servicing practices. This particular case culminated in civil and other administrative actions taken by the Department of Justice.
Market Impact:
The potential impact of mortgage fraud on financial institutions and the stock market is clear. If fraudulent practices become systemic within the mortgage industry and mortgage fraud is allowed to become unrestrained, it will ultimately place financial institutions at risk and have adverse effects on the stock market. Investors may lose faith and require higher returns from mortgage backed securities. This may result in higher interest rates and fees paid by borrowers and limit the amount of investment funds available for mortgage loans.
Often times, mortgage loans are sold in secondary markets or are used by financial institutions as collateral for other investments. Repurchase agreements have been utilized by investors for protection against mortgage fraud. When loans sold in the secondary market default and have fraudulent or material misrepresentation, loans are repurchased by the lending financial institution based on a 'repurchase agreement.' As a result, these loans become a non performing asset. In extreme fraud cases, the mortgage backed security is worthless. Mortgage fraud losses adversely affect loan loss reserves, profits, liquidity levels and capitalization ratios, ultimately affecting the soundness of the financial institution.
Proactive Approach to Mortgage Fraud:
Over the past five years, the FBI has implemented new and innovative methods to detect and combat mortgage fraud. One of these proactive approaches was the development of a property flipping analytical computer application, first developed by the Washington Field Office, to effectively identify property flipping in the Baltimore and Washington areas. The original concept has evolved into a national FBI initiative which employs statistical correlations and other advanced computer technology to search for companies and persons with patterns of property flipping. As potential targets are analyzed and flagged, the information is provided to the respective FBI field office for further investigation. Property flipping is best described as purchasing properties and artificially inflating their value through false appraisals.The artificially valued properties are then repurchased several times for a higher price by associates of the “flipper."After three or four sham sales, the properties are foreclosed on by victim lenders. Often flipped properties are ultimately repurchased for 50-100% of their original value.
Other methods employed by the FBI include sophisticated investigative techniques, such as undercover operations (UCO's) and Title III wire taps. These investigative measures often result in collecting valuable evidence and provide an opportunity to apprehend criminals in the commission of their crimes and reduce losses to financial institutions. These proactive methods do not preclude historical investigations; however, they provide the FBI with additional tools to conduct large scale investigations through operational efficiencies.
In August 2002, the Cleveland FBI Office culminated a two-year UCO targeting industry insiders. The UCO focused on mortgages settled by American Home Loans employees and corrupt professionals including appraisers, accountants, mortgage brokers and loan originators. Representatives of American Home Loans were able to orchestrate the scheme by fabricating loan applications and the supporting documentation (W-2s, tax returns, employment/income and bank verifications). As a result, industry insiders were able to circumvent the safeguards of numerous finance companies. The pervasive loan fraud caused property values to be artificially inflated in the greater Cleveland area. Through this UCO, more than 150 targets were identified, 23 search warrants were executed, and 94 targets were indicted, including two accountants, four title company employees, five appraisers, eight underwriters and forty loan brokers.
On September 16, 2004 an undercover mortgage fraud investigation conducted by the FBI Charlotte Division resulted in the identification of more than 35 industry insiders, and more than 380 fraudulent loans exceeding $70 million. In November 2002, the investigation was initiated due to numerous complaints by the North Carolina State Bureau of Investigation and lenders regarding high loan default rates within a short period of time. The FBI identified a pattern of pervasive mortgage fraud in the greater Charlotte area. The investigators determined the most efficient and effective approach to this investigation was an UCO. This not only resulted in the identification of a large number of corrupt industry insiders, but also prevented further fraudulent mortgages. Seven plea agreements have been signed to date; the investigation is ongoing.
Fraud Trends:
Although there are many mortgage fraud schemes, the FBI is focusing its efforts on those perpetrated by industry insiders. The FBI is engaged with the mortgage industry in identifying fraud trends and educating the public. Some of the current rising mortgage fraud trends include: equity skimming, property flipping and mortgage identity related theft.
Equity skimming is a tried and true method of committing mortgage fraud and criminals continue to devise new schemes. Today's common equity skimming schemes involve the use of corporate shell companies, corporate identity theft and the use or threat of bankruptcy/foreclosure to dupe homeowners and investors. Property flipping is nothing new; however, once again law enforcement is faced with an educated criminal element that is using identity theft, straw borrowers and shell companies, along with industry insiders to conceal their methods and override lender controls. It should also be noted that identity theft in its many forms is a growing problem and is manifested in many ways, including mortgage documents. The mortgage industry has indicated that personal, corporate and professional identity theft in the mortgage industry is on the rise. Computer technology advances and the use of online sources have also assisted the criminal in committing mortgage fraud. However, the FBI and its law enforcement and industry partners are working together to identify trends and develop techniques to thwart illegal activities in this arena.
Law Enforcement Partnerships:
In 1999, the FBI joined forces with HUD-OIG to establish the Housing Fraud Initiative (HFI)Task Force. As a result, numerous successful joint investigations were conducted in New York, Baltimore, Washington D.C., Chicago, Los Angeles, and Dallas. The FBI is actively investigating mortgage fraud in those cities and continues to promote joint investigations with HUD-OIG and other federal, state and local law enforcement and regulatory agencies wherever mortgage fraud is prevalent.
With regard to the HFI initiative the following serve as examples of successful joint investigations:
A two-year joint investigation by the FBI , the IRS, and HUD-OIG revealed a fraud for profit scheme committed by several insiders of First Beneficial Mortgage Corporation. This two year fraud was perpetrated against Fannie Mae and Ginnie Mae home loan programs resulting in losses exceeding $30 million. Recently, the president of First Beneficial Mortgage Corporation and six others were convicted on conspiracy, bank fraud, wire fraud, and money laundering charges. The president was sentenced to 21 years in prison, ordered to pay $23 million in restitution and forfeited about $8 million in property.
A joint investigation conducted by the Los Angeles FBI Office and HUD-OIG illustrated an extensive scheme in which fraudulent identification and employment documents were used to perpetrate mortgage frauds. The scheme was largely assisted by an individual who regularly manufactured false identity and income documents for a profit. This document forger created W-2s, pay stubs, credit letters and social security printouts over an eight-year period. These documents were used by real estate professionals who knowingly submitted the falsified information to lending institutions. The loans were then insured by HUD and caused a loss to that agency of more than $18 million. A search warrant executed during the investigation revealed more than 100 real estate professionals had ordered false documents in the past. To date, the document forger and six associates have been convicted in the scheme, as well as fourteen real estate professionals.
A two-year joint investigation conducted by the Kansas City FBI Office, IRS, and HUD-OIG culminated on August 13, 2004 with the arrest of a local real estate investor. The real estate investor and three business associates were charged in U.S. District court for their alleged roles in purchasing run-down properties, securing fraudulent appraisals and obtaining mortgages in the names of straw purchasers. The straw purchasers were allegedly paid $2,000 for their role in the scheme whereby they placed properties in foreclosure, leaving the real estate investor and his associates with the mortgage proceeds. This scenario was repeated approximately 300 times, resulting in losses to lending and financial institutions in excess of $15 million.
Industry Liaison:
partnerships with the mortgage industry to promote mortgage fraud awareness. Over the past two years, the FBI has spoken at and participated in various mortgage industry conferences and seminars, including those sponsored by the MBA. This year the FBI will be speaking at and participating in the MBA's 91st Annual Convention and Expo. The MBA estimates that six thousand industry leaders will attend this conference.
To raise awareness of this issue and provide easy accessibility to investigative personnel, the FBI has provided contact information for all FBI Mortgage Fraud Supervisors to relevant groups including the MBA, Mortgage Asset Research Institute, Fannie Mae, Freddie Mac and others. Additionally, the FBI is collaborating with industry to develop a more efficient mortgage fraud reporting mechanism for those not mandated to report such activity. This Suspicious Mortgage Activity Report (SMARt Form) concept is under consideration by the MBA. The FBI supports providing a 'safe harbor' for lending institutions, appraisers, brokers and other mortgage professionals similar to the provisions afforded to financial institutions providing SAR information. The 'Safe Harbor' provision would provide necessary protections to the mortgage industry under a mandatory reporting mechanism. This will also better enable the FBI to provide reliable mortgage fraud information based on a more representative population in the mortgage industry.
A recent analysis of mortgage industry fraud surveys identified 26 different states as having significant mortgage fraud problems. Although every survey identified Georgia and Florida as having significant mortgage fraud related investigations, the survey also identified nine other states in the South and Southwest, seven states in the West and five states in the Midwest as having mortgage fraud problems. Once again, these studies illustrate the need for increased coordination among industry and law enforcement on mortgage fraud.
Lenders are increasingly aware that fraud is affecting their bottom line. Through routine interaction with FBI personnel, industry representatives are aware of our commitment to address this crime problem. The FBI frequently participates in industry sponsored fraud deterrence seminars, conferences and meetings which include topics such as quality control and industry best practices to detect, stop and prevent mortgage fraud. These meetings play a significant role in training and educating industry professionals. Companies share current and common fraud trends, loan underwriting weaknesses and best practices for fraud avoidance. These meetings also increase the interaction between industry and FBI personnel.
Additionally, the FBI continues to train its personnel and conduct joint training with HUD-OIG and industry on mortgage fraud. As a training model, the FBI seeks industry experts to assist in its internal training programs. In this past year, industry has assisted training FBI personnel on mortgage industry practices, documentation, laws and regulations. Industry partners have offered to assist the FBI in developing advanced mortgage fraud investigative training material and fraud detection tools.
Conclusion:
In conclusion, the FBI is committed to increasing liaison and education efforts and partnering with federal, state, and local law enforcement, and private industry to combat mortgage fraud. The FBI supports new approaches to address mortgage fraud and its effects on the U.S. financial system, to include:
a mechanism to require the mortgage industry to report fraudulent activity, and
the creation of“Safe Harbor" provisions to protect the mortgage industry under a mandatory reporting mechanism.
Mr. Chairman, the FBI looks forward to working with you and other members of this committee on solving this problem. Thank you for allowing me the opportunity to testify before you today. I will be happy to entertain any questions you may have.
Not the same thing!
I never once stated that OCWEN or any other of the companies mentioned don't break the law. I addressed the foreclosure question for everyone that thinks they want to take your home. It is well known that a lot of these companies mentioned inflated appraisals and do other shady things to get loans done and I will be the first to say so.
I would rather these companies go away! Even though they bring me a lot of business they also put a black eye on my industry that has done far more damage than good.
People need to take some responsibility for their actions PERIOD! Is it the companies fault when a person does not read the contract they are signing? They have specific laws in place to protect them and they still refuse to read it in the given time period and then get on here and whine!
People if you see something that looks fishy then walk away and go with another company, it is as easy as that! It will save you many headaches in the future.
Robert I believe you have misunderstood what is being said in some cases
Robert,
Since you work in the home loan industry you should know that when it comes to mortgage servicing, most people do not have a choice in who services their mortgage. Of course the loan contract can be written to prohibit the loan servicing from being transferred but that may price many people right out of the housing market. I may be wrong but I don't think anyone here is saying that all mortgage companies are thieves and that they all want to steal their homes. But there are a few, mostly the service companies and it appears that no one, especially the government is doing anything to stop them.
I admit that I too cringe every time I hear someone say: I was “X" months late on my payments and they foreclosed. In my opinion, under most conditions there is really nothing to gripe about from a legal stand point anyway, as long as the mortgage servicer didn't somehow contribute to the customer being late. Like stacking checks, purposely giving wrong addresses, etc. which, believe it or not, some do. But if the customer is at fault, at most, it be a moral issue but certainly not legal one and therefore should not be posted on this or any site. Like I have said before, the problem is that no one has been enforcing these contracts on behalf of the borrower against the service companies until just the last couple of months. And this is costing everyone money, especially us tax payers and PMI insurance companies, etc.
Hit the nail on the head!
Jon, Unfortunately people don't get to choose who services their loan these days and some of these companies are doing fraudulent things. I was just saying that these companies are not out to foreclose on houses. Are they adding fees that make them money? Most definitely! But for me to sit here and read about people thinking they are getting ripped off because they haven't made a mortgage payment in 4 months and now the bank wants the collateral back, is crazy! Those are the ones I was talking about.
By no means was I defending these companies and to be honest I am tired of dealing with them as well. They have become so bad that my work is doubled just trying to get a simple task done with them because they are so bad now.
I also agree that the government does need to get more involved with this and watch these companies a little closer. But since these companies seem to have very deep pockets that won't happen for a while.
Predatory Lending and Foreclosures
Well, not that I am in support of large mortgage companies, but some people are portraying them as the 'big bad mortgage company' and yes there are a ton of bad corporate conglomerates that are bringing down the industry but they're not the only bad guys. Predatory lending has been a big issue for state and federal banking commissions since the 1980's(you know the 18-25% mortgages)and it has been their goal since then to protect the consumer. The banking commission of each state audits once a year, at least, every licensed mortgage company to make sure that they are in compliance with the banking laws for each particular state that they are licesed in and go through hundreds if not thousands of files one by one to make sure that the client has 1. not been ripped off 2. laws were not broken and 3. that the financial institution is doing what it can to protect the consumer from foreclosure. Companies like Conseco/Greentree (who have been charged with predatory lending and shut down and sued) are no longer in existance because of the every changing laws in the banking field. People don't realize how much is governed by the banking commission- banks, mortgage companies, bill collectors, credit unions, pretty much any kind of financial institution where large somes of money are involved.
Banking laws have become so strict in certain states i.e. Mass, that you have to jump through firey hoops to get the loan done. In most states, there is a ceiling to how much can be charged between the attorney, the bank and the mortgage company. In some states, prepayment penaties are prohibited and you must show a benefit to borrower or the bank won't approve the loan. You must show that this loan isn't going to put this person into foreclosure and that if a accident happens or they lose their job, that they will be able to make at least two months worth of mortgage payments. Most brokers will not do mortgages for people who can't afford it and most foreclosure bailouts come with a year worth of payments cash out to the client, just in case.
Yes, there are bad mortgage companies out there. The large companies, Countrywide, Ameriquest, Wells Fargo, among some others, are the largest foreclosing companies in the US. Why, because people go with the name brand stuff. They have a big name and big name is always better-or so people think. The loan officers who work at these companies don't really care about the consumer, they're just there to get loans and make sure that they don't foreclose within the first year of that loan. Other than that a client with a 800 score and tons of money is the same as a client with a 535, three children, struggling to get by client. Your first mistake when you get you mortgage is going to a big company with limited options. Its like going to a Starbucks and trying to get a chocolate milkshake, your not going to get a full variety like going to a broker who can shop you around with little or no consequence or cost to you. They're gonna anaylize the situation which is best for you and a good broker-which there are a lot of- will work with you for the best solution.
Going directly to the bank isn't much better- Home Equity loans take weeks to approve through a bank and the interest rate can jump sky high if and when the market moves. The 30 year fixed is only gonna help you if you plan on never refinancing again, never gonna take equity out of your home, and you're gonna live through the 30 year fixed i.e. 80 yr old grandparents that refinanced to get the rate down. Chances are a Adjustable Rate Mortgage will save you more money and a good broker will refinance you for cheap or free if your a returning client. As for charges from the mortgage company- the fees charged on a refinance are tax deductible and should be written off. On a purchase, there's seller concession-meaning the seller will pay closing costs. This is why you should use a broker, they tell you all the good stuff that the bank will not.
In reference to the fees charged during the mortgage, I really can't help you there...I can only warn you to stay away from the larger companies because the bigger the name, the bigger the fees. You really don't start paying down the principal until your halfway through the loan anyway. The bank has to make they're money someway...that's how they do it.
As for these cheap and easy companies like Ditech.com and Lending Tree...keep in mind that they have to make their money too. You may not see the money come out but its there. If they don't take the money up front, then their money is coming out of the rate. Low closing costs high rate is usually everyones gimmick or the other way around. Yeah you're getting a 4.375 but your paying 20k in closing costs. There's an even balance. Someway they're gonna get you.
In reference to foreclosure, yeah mortgage companies and banks are all the bad guys...NOT!!! Most people put themselves in that situation and they like to play off the 'I'm the Victim' gig to get sympathy when they lost their house.
Now don't get me wrong, there are a few out of the population who lost or are losing their house because of legitimate reasons...and I do sympathize. I recently had a lady who developed two kinds of cancer and her hubby used all the money for the expensive medical treatment..which is why they couldn't pay their mortgage. They refinanced and got out of that situation with money to spare and God is looking upon her cause she's beaten both cancers and just had a very merry christmas with her devoted hubby and three kids.
The elderly who can't aford to pay their bills and mortgage go into reverse mortgages-the loan is for the life of the client and the loan is non assumable by anybody else. Basically, the person, if any family, who has right to the house can refinance/buy the property and get rid of the reverse mortgage and not worry about that company taking the house on account of the clients death.
What I don't have sympathy for are gold diggers and con artists who claim they are the victims because of gambling debts and various other small loans that they took out without thinking to buy expensive unneed things, like fur coats, new cars, big screen tvs, etc. I also don't have any sympathy for people who didn't pay their mortgage for months and months and months while they held a job or got a new one from a layoff and don't have a dime to show because they didn't think the bank would take their house or that they'll be able to sue and keep they're home. Keep in mind, big banks don't negotiate unless it benefits them. If your bank who is foreclosing on you offers a new deal, be very wary because they might just end up putting you back into the same situation again months or years down the line. This is what a broker warns you when the bank finds out that your trying to refinance and save your home. Bank people work for the bank, brokers work for you. I'm a broker and I have a mortgage on a 400k house, but I can't and would not do my own loan. I also am not running to countrywide to get me a loan because I've got a better deal through a smaller company who will not sell off my loan. I don't have to worry about my payment going to the right company every month because of the loan being sold.
Next point, if mortgage companies are so bad then why are there brokers out there that try to help people out of foreclosure, like myself. I know what my clients can take and I know when they're going to runnoff with the money and come back in a year and blame me. Their attorneys hold the money and make the payments for them so in a year they can go to any company anywhere and get a new loan. Yeah the interest rate is high, but when you have bad credit who's gonna give you a 6%. No bank will lend to a consumer who has below a 500 credit score, I help those people too. Am I the bad guy for saving thier house. I'll let them decide that in the comfort of their own homes. Many people do this, its just a matter of looking.
As for those people who slowly over time ran themselves into a hole and can't get out...yes I feel your pain, trust me I've got more in credit card debt then I'ld like to think about...but I would rather not make a credit card payment or make some arangement with the local hospital about that emergency room bill than not make a mortgage payment. Bill collectors can be settled for less, hospitals have payment plans and work with patients to get the treatment they need, mortgage companies will just take your house. Think about it, you won't be worring about making that Chase card payment or AMEX payment if you live on the street.
For these people that are drowning in debt, there is really not much you can do. This is gonna come out rude and obnoxious but you put yourselves there. Now the only exception to this is student loans...go refinance your student loans...it save you money on the interest and its cheap. If you've got more store cards than credit cards, you definatley put yourself into this situation. Nobody needs a store card, you can only use it at that one store and it won't buy your groceries or pay your car loan. Get rid of it. You only need two or three credit cards and you don't need balances over 5k. It amazes me that some friends of mine have 10k credit limits on certain cards and spent 8k. The more you have, the more you spend...its bad for your credit. Creditors don't want to see that you're living on your credit cards, the just want to see that your paying them off on time. More than three credit cards= bad news. It brings your score down and makes mortgage companies start to wonder if you make as much as you say you make.
If you find yourself in this situation, you have a couple of options. Get another job, yes americans are lazy, but you know what it takes a average of 1.75 jobs for the average american to stay ahead of the debt. Get another job to ease up cash flow on the credit cards and pay off debt. Don't think that because you have a second job that thats more money to buy other stuff. My mother worked two full time jobs and one part time to support my sister and I through school and pay bills when my father died...and this was only five or six years ago. My father left a ton of debt and a house that needed serious repair. So don't act like this can't happen to you. Social security didn't help much because what was left was not enough to pay for basic living needs. Don't depend on what you don't have. If you've already taken that route, then make the lazy members of your family, those who aren't working get a job or get a second part time to help out. If you are disabled or elderly and am limited to what you can do, try for government assistance programs, there are plenty out there. Reverse mortgages help the elderly get rid of the mortgage payment that's bothering them and focus on their health and family. The only other option is Chapter 13 and Chapter 7 Bankruptcy. It is there to help the consumer not lose their house and get back on the right track.
Addressing the mortgage history before 1998, okay rule of thumb is after seven years, it gets thrown out. Its the same with banks, credit card companies, car loans, etc. Would you really want on your credit report a account from 1967 that you were late on once...NO! Credit reports would be 25+ pages long and banks would hold onto your closed accounts and bank books forever. It just doesn't make sense. So why would any mortgage company keep records of what you paid before 1987 years ago?
As for all companies being the same...watch the market. See what happens in the next couple of years. You complain that there are so many companies that are all the same, in the months and years to come those bad companies will be put out of business by the slowing market and then recession. It happens in cycles every ten years or so. A ton of companies that don't have roots will be put out of business and those bad companies will suffer. The good will close with the bad. A ton of 'hard working americans' will be out of business and the economy will suffer. It has already started.
Blaiming this on the Feds isn't going to help you. The problems that your trying to fix need to go to your state congressman or women to get reform from the banking commission. Only there you will get results. Keep in mind things take time.
cvmoxford@yahoo.com
Boycotting the Real Estate Market
Please do not be mistaken, this is not a personal attack on the woman who mentioned boycoting from buying a home.
Quite frankly, I was appauled when I read this particular comment because if everyone refused to buy a home and there was no real estate market then the market would crash and things would be as bad if not worse than the Black Friday Market Crash in 1869. The real estate field effects so many people and is the one common denominator between all trades in the US. Think of it this way, without that market- every loan officer, processor, secretary, president, etc. of all mortgage companies would not have a job. Local banks, such as Bank of America, federal credit unions, and small chains of banks would go out of business becasue their biggest holding in the stock market is directly related to real estate. Without mortgage companies- real estate attornies, appraisers, real estate agents, home inspectors, insurance companies, and tax assessors would be non-existant. Employees at town and city hall would not have jobs because it deals with real estate, which no-one owns. Existing buildings would fall into decay and eventually be condemned because the property management companies of these houses, condos, and office buildings don't exist and are hired out by the companies and people who owned the propery. Contractors, electricans, plumbers, and all trade related works would be out of business because there is no new construction anywhere and they can't get a loan from a MORTGAGE COMPANY to build a new home or new building. People who owned homes before this economic crash would lose their jobs because their company is 'consolidating' and can't keep up with the expenses of maintaining the building along with running a business. Doctors and attorneys and trades people would have to raise the cost of thier services to make a profit because the extra mateniance on these buildings will add up fast. People are having problems paying for emergency room visits now, what do you think is going to happen when medications and everything else doubles in price. Hundreds of thousands if not millions of people would lose their jobs and their well being beyond just the real estate field. The US would receed and become a third world country because it's economic well being has been destroyed.
You get the general gist of where this is going. Let me put in perspective for you.
Think of it this way, you're living in a small town with a rather large company in it. Now this company provides jobs, benefits, educational needs, etc. for its employees. Now this company has been around for a real long time and really helped the economy in the surrounding area a ton. Its expanded and helped the town become financially stable and more people are moving to into the area, lowering taxes and easing the expense the town is spending. The company is being so helpful, that it helps pay for repairs in local school systems and helped pay for the new hospital. This goes on for years and years and years until one day, the large company announces that 'its just too expensive' to stay in your town and now must pull out of the area. The company release a press release that the company will be laying off all of the 2500 employees. That's aprox. 85% of the total population of your town that once was contributing to society and helping the economy that now are unemployed. Well unfortunatley, the unemployment fund does not have enough money in their reserves to support nearly half more or less the whole 2500 people. What happens...economic calapse. This is what New Milford, CT and several other towns are doing in the US as large companies like Kimberly Clark and Nestle, which are vital to their economy, are pulling out and causing economic distress and then collapse. It's the ripple effect.
No imagine that little town, New Milford, being the whole US. That's what will happen if you close down all the mortgage companies. It's already starting to happen...Look at Ameriquest-which owns various sub companies like Argent Mortgage and Olympus Mortgage- and Encore Credit Corp. They are laying off hundreds of people to prepare for the economic slump that is coming up. Over the next couple of years, hundreds of small mortgage companies, banks, and broker firms will shut down and it will take its toll on the suuronding fields. Watch the market and see what happens. The market will slow down and all will be effected. It happens ever 10 years, what's gonna stop it. How are you gonna pay rent if it double or triples and your job will pay you no more than minimum wage? How will you eat?
Let's Be Realistic. anybody who thinks companies make money on foreclosures is crazy
Following up to what Robert has said here, anybody who thinks companies make money on foreclosures is crazy. Think about it... Most people are in the range of 75-80% 'loan to value' (what they owe vs. what the house is worth) in their loans. When a company forecloses on a houses, they generally sell it as quickly as possibly to try and recoup their losses.
And selling quickly means what? Selling it far under market value. Why do you think people who buy real estate often times love foreclosures? Because companies generally sell those houses for 65% of what the property is actually worth. Which, based on the above figures, is at A LOSS.
Sure, generally people trash the place before they are kicked out, but it's still a huge profit to be made.
I don't mean to sound harsh here, but the fact is, you have to PAY YOUR BILLS. Don't be four months late then come crying on here about someone taking the collateral. If you loaned someone $400,000 and they didn't give you any payment for four months, wouldn't you come looking to recoup your losses?
Are there problems in the industry? Of course! But to say companies are foreclosing to profit from your loss is ludicrous.
And in response to Cheryl, who suggested that you go find a broker who can get you the best deal... As someone who has worked in this industry both for a big bad mortgage company and as a broker, I have to tell you, there is far more predatory lending going on in the broker side than the direct lending side.
Are you going to hear problems about these big companies? Of course! Just based on the volume of business they do, there's bound to be problems. But if you took an average, I would bet any amount of money that the percentage of predatory lending in the broker world vs. direct lending would be higher in the broker world. And, from a loan officer's side, the loan officer at Wells Fargo has FAR less at stake than the broker. The Wells rep is getting a salary. Will they get a nice bonus for closing your loan? Sure. But, they have something coming regardless.
The broker, in most cases, gets no salary. Their kids dinner depends on you taking their loan with three points (of which a large chunk, if not all, goes in their pocket) and a few points on the back end. So, the chances of them feeding you a line to get you to take their loan is generally higher, and it's been that way in my experience.
That being said, if you find a good and honest broker, they can get you better deals than you'll find at the big bad mortgage company. Just don't be surprised when your loan is sold for servicing to said companies. 85+% of loans done by brokers are generally transferred within a year.
There's a document in your loan papers that tells you what the chances are that your loan will be sold within a year, so you as a consumer are aware that this would happen. Plainly put, there are pros and cons to both sides of the industry.
The moral of the story, however, is to just pay your bills on time. You know what you're getting into when you sign. (Hopefully) Sure, bad things happen, and companies generally try and help you work through these things. But there are consequences, and you can't blame those on the company who lent you hundreds of thousands of dollars in good faith.
Jason. Jason, Jason! you have absolutely no common sense
Jason,
Either you have absolutely no common sense or you simply can't read! Which one is it? Maybe Robert will be nice and take you under his wing and teach you a thing or two. After all he may not be ready to accept the truth about some of the less savory mortgage servicing companies and how they make fortune in revolving foreclosures, but at least he has a clue.
Jon. Jon, Jon! - Nobody is denying that there are shady actions being done in the industry
Jon,
Please, tell me where I'm off on this one? There are far bigger profits to be made on keeping a mortgage over a 30-year timeframe than stealing it from somebody and selling it under market value.
On a $250,000 at 7%, a homeowner will pay a total of $348,769 in interest alone over the life of the loan! That makes the small amount of profit (which is usually NONE in most cases of borrowers who have tapped out their equity, or even come within 35% of doing so) supposedly made by foreclosing on people look like chump change.
Is there cases of companies making profits off of foreclosures on a case-by-case basis? Of course there are. But I can almost guarantee that if you took the overall profit-and-loss from a total portfolio of foreclosures, the loss far outweighs the profits. Why else would they try everything for 4-6 months to get people caught up? Why else do so many real estate investors drool over the thought of buying foreclosures?
Nobody is denying that there are shady actions being done in the industry, but foreclosures are far and away one of the worst examples of fraud in the industry that you could bring up.
If you want to talk about common sense, maybe you should put your conspiracy theories back in the closet.
Jason, you are missing a very important fact here!
And just for your own edification I will tell you what it is. Here we go again. It is the loan “servicing" companies that are making a killing by forcing people into foreclosure. By-the-way, It doesn't matter if the foreclosure is warranted or not, it is still highly profitable for them despite what you may think... I have seen it happen time and time again. But don't take my word for it…. Talk to the people in the know, those who are in the trade they will assure you that it happens all the time. The fact is that the actual sell of a foreclosed home only represents a small portion of the profits associated with the overall foreclosure scam. After all, there's all those bogus fees to be charged: including high dollar legal attorney fees, processing fees, recording fees, appraisal fees, inspection fees, etc. Not to mention all the cash that is sucked in through the use of worthless, and often illegal forbearance agreements where the homeowner actually pays thousands of dollars up front, and by-the-way seldom gets credit for, just for the right of paying and even higher monthly payment simply because the service company failed to acknowledge the payment{s) that were been sent via registered mail and on time I might add. And of course, as is quite often the case; by some mysterious and unknown means the last and final forbearance payment is always delayed past its due date or outright lost. Therefore, the whole process of wealth transfer from those who cannot afford proper legal representation to those who can starts the process all over again, until at some point the homeowner runs out of reserve or simply calls it quits, and foreclosure finally takes place. At which point the home may often be sold to some long lost distant relative or a firm affiliated with the servicer. The ex-home owner gets dinged and charged for the remaining inflated balance. The sevicer usually sends a bogus statement to the IRS to obatin a tax right off and the home simply gets sold again at an inflated cost to the next victim, who will most likely be recycled through foreclosure mill once again until they are serviced into poverty. Now isn't that a pretty picture? THAT'S MY OPINION AND I'M STICKING WITH IT BESIDES, I'VE SEEN IT TOO DAMN MANYS TIMES NOT TO.
FORECLOSURES MUST BE PROFITABLE /IF NOT WHY ARE THERE SO MANY WRONGFUL FORECLOSURES
Predatory lenders, many of them intentionally go after homeowner's that have a huge amount of equity already built up in their homes. Many of these homeowner's loans are based solely on collateral and equity in their homes and not based on their income. The banking industry has Litton to do their dirty work. THESE PREDATORS wait for a missed payment; death, sickness or any reason to swooped down and steal the homes that hardworking people have had for many years. Most of these homeowner's, especially the elderly, mortgage notes were already paid in full before they took out loan. Predatory lenders, search for these type of loans because they know, they will recoup not only all the payments already paid, plus, as in example below, a big chunk of money after the foreclosure sale. It is a racket! The lack of or in the case of Litton no enforcement action at all by lawmakers is the major reason for the continual fraudulent activity.
In my case, I had paid Litton $88,000 on a $95,000 equity loan. However, Litton tried to foreclose and snatch my property from me and put me out of my home in the depth of winter. My property had a large amount of equity already built up, also. Now I ask, why would a company treat a customer in this manner, when the customer has clearly been a good paying customer and the mortgage company's have all gotten there cut while transferring the loan four or five times, Why? Because they are greedy and would have made additional money on the auction sale. In these types of cases, mortgage companies definitely make money on foreclosures. In my case, they already had received $88,000 in payments, on a $95,000 loan. So technically all was owed on the loan was $7,000.
Con artist, Litton and let's not forget the attorney's that make a killing off of these fraudulent foreclosures and all other culprits involved would have taken my home from me just for interest money. These mortgage company's are not in the business of performing or servicing loans anymore! The main objective of these predators is to get as much money as they can and move on to the next victim, take their home and make more money. The foreclosure cycle continues in every state in this country!
Don't blame the consumer, blame Ocwen. Ocwen is a bad business with no ethics.
Ocwen is a bad business. I have been trying to get payoff for my new loan co. for a month. They have called and faxed and I have called and faxed Ocwen with no results. I have been pre approved for a loan with another bank since dec. 22 but Ocwen is holding off on producing the payooff. They always have a new excuse. don't blame the clients of Ocwen. Ocwen is a bad business with no ethics. Why would he woman from Texas win her suit. Even when someone is late, they still have rights. Ocwen needs to be shut down! If there are any new lawsuits against them please let me know.
OCWEN TRANSFERRED MY LOAN TO LITTON THAT STARTED THE NIGHTMARE!
I agree with you Ocwen if horrible. You're right on! It's ridicoulous for anyone to blame the victims (consumers) who are the ones suffering from there fraudulent behavior. The OTS did file a complaint against them.
A class action lawsuit is going on now against Ocwen for the very things you spoke about?
Failure to Abide by Best Practices is no big deal - - Wake up. There is fraud at every turn in the mortgage industry and it is not all about slimey borrowers.
I am a former borrower who was saddled with Fairbanks Capital as my servicer.
I had a 10 yr fixed rate mortgage where I paid the taxes and insurance.
My loan was traded around in the secondary market a few times before I ended up with Fairbanks.
I have to disagree with the tone and flavor of the some of the comments here about borrowers.
I have successfully paid off 4 mortgages. 3 of them without a hitch. What's so tough about repaying a mortgage? You write the check and toss it in the mail so that Fairbanks receives it on or before the 1st of the month. Then do it again until the loan is repaid.
What you industry people don't seem to understand is that you don't have to be a deadbeat that doesn't pay their bills on time for Fairbanks and the other predatory mortgage servicers to put your loan into default status.
I never made a late payment for the life of my loan and I sent $1,000.00 a month extra principal payment.
I paid off my 10 yr loan in 4 1/2 years.
Now, you'd think Fairbanks would have left me alone.
They didn't. I spent nearly two years mud wrestling with them to prevent them from putting my loan into default.
Keep in mind, I did nothing wrong and I have the proof to back up this statement.
I have all my canceled checks for the life of