By Poppy (30 year mortgage industry veteran)
It is the 3 C’s – Credit, Capacity and Collateral, of course the idea that Credit = Willingness to Repay; Capacity = Ability to Repay/Assets to Afford the Ongoing & Initial Outlay, and Collateral = Value/Marketability of Property/Asset Supports the Request (simplistic at best and goes to the fact that the Asset’s Marketability supports the continued desire to repay and supports the amount of the credit requested -these days not so simple). Then, the one that you all suspect -if we have to take the Property/Asset back will we be made whole.
The 5 R’s refer to Blemished Credit issues – Rehabilitation, Remorse, Restitution, Recognition, Recidivism. Rehabilitation = New Credit Reestablished over a reasonable period of time with no adverse rating; Remorse = I screwed up, and am I sorry; Restitution = Paid Back the Collections, Judgments, Charge Offs, etc…; Recognition = What caused the issues, and Recidivism = Why it will not happen again (there are variations of the 5 R’s, probably predicated on the type of credits involved). It helps to have these issues encapsulated and not chronic. Chronic = No Loan, i.e. None of the 5 R’s, you just do it ’cause you can and have gotten away with it for years. Better known as Chronic Financial Mismanagement.
Now as some of you who are in the business for over 10+ years have guessed, I am an A paper kind of person. So for those of you who think I ushered the Sub-Prime Crud through the door of mortgage heaven, NOT. Yes, I did underwrite Sub-Prime, NO, I was not a favorite of the AE’s, Management or Brokers when I did so. I treated it like FHA paper, just because it was Sub-Prime did not mean it was a free for all, to all who came to the party. I never, ever got a “bonus” for underwriting and would/will not work for anyone who “commissioned” their underwriters. Absolutely lacks any degree of Ethic or Integrity.
Did I make some loans that have gone/may go south…..yes, why – because we all looked at credits that had Guidelines that were absolutely ghastly. The idiots in Risk and Product Development were smoking something a little stronger than a “leafy green substance”. As often as possible – I found a supported reason to Decline the request, as often as not management signed off.
Just for s*&% and giggles – go back a year and look at those guidelines – then tell me you would lend your money to someone with the Credit Reputation we saw reflected in the requests we got for 80/20 Combo’s, let alone an 80/20 Combo in and of itself comprised of NINA, SIVA, SISA, NINANE, No Doc, No Ratio….. Unless you are presently smoking something stronger than a “leafy green substance” it would be NOT.
Now for those of you beyond the “Blame Game” and other inanities – go look up the traditional concept of Prudent Man Lending. More than anything, that got me to HR on a regular basis, I tended to ignore the more esoteric guidelines, in favor of Prudent Man Lending – ’cause it was some other man’s money I was granting the approval to lend. Trust me if it was mine, it would never have been lent, and so it goes of the other man’s money as well. Prudent Man Lending = Fiduciary Responsibility.
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Here’s some insight to the mortgage broker’s mind. Now think about the toxic loan you’re in. You can thanks some of these guys and the programs that they offered (conned) you into.
http://implode-explode.com/forum/viewtopic.php?t=2467&postdays=0&postorder=asc&start=0&sid=f9b1ba3efba0e11fff9d35d0640a7517
(copy and paste)
That az guy is a capitalistic pig.
I did a fair amount of 80/20 No Ratio’s, but they were good loans: bartenders who cheated on their taxes & who bought very modest houses, loans in the wife’s name where the husband (with lousy credit) had plenty of additional income. Those loans will perform no worse (and no better) than a full-doc 100LTV My Community Mortgage. The problem with 100% reduced doc loans was that for every LO (like me) who had to satisfy themselves that the borrower could handle the payments, there were 9 or 10 who could’ve cared less. Also, the immediate cause of the Alt A crash in mid-summer was the fact that at the very tail end, occupancy fraud suddenly became rampant. 100% SISA’s lent themselves too well to “straw buyers” who would close the same day on 6 different “owner-occupied” properties. There was a massive spike in that crap in about May 2007. That’s when the many undercapitalized wholesalers said “Holy Sh!t! All these loans we just funded are total garbage” They couldn’t get them off their lines & they were instantly insolvent. Many people in business simply aren’t paranoid enough. Their minds can’t even imagine the worst-case scenario.
Moe,
I’m tired of that stupid label, “capitalistic pig”. Capitalist means private owner of means of production, also called capital. The author of the thread has nothing to do with being “capitalist”, he didn’t invest in acquiring means of production and so he is not a capitalist. He may be a pig, but he ain’t a capitalist one. He is a middleman, he doesn’t represent either party and he has no skin in the transaction.
Sorry Moe, but I don’t understand how you are comparing sec 8 overcharging at (settlement) to a foreclosure situation where attorneys are involved and penalty fees are being enacted(servicing). Understand you are trying to inform but you are mixing two rules that have nothing to do with each other and rolling it into a slogan to look at your site. Nonsense. Most lenders give you the fee break down with the repayment plan. They’re usually very specific. I’ve worked with many people in foreclosure and have only rarely seen mistakes on fees, and usually the fluff fees(penalty fees per note and deed to be charged when borrower is in default) are taken out to make it easier for the homeowner. Let’s try to inform consumers that lenders will work with you if you know X and Z but trying to inform then with information that isn’t cohesive to battle the lender is nonsense. Good Luck anyone who is in foreclosure don’t get caught up in all of these I’ll buy you out of foreclosure and put you in a hard money loan for a few year schemes.
Moe,
How about the big lenders that own appraisal management companies?
ie Countrywide-Landsafe, Wells Fargo-Rells, Wachovia-WSS charging appraisal fees on the HUD 1 of $400-$600 and paying the appraiser $200-$600.
Other examples are suspect BOA-Quantrix, any lender using EappraiseIt, LSI, Valocity, Forsythe the list goes on!
Conversation with attorneys indicates apprehension as various District Courts have differing view points?
Moe,
How about the big lenders that own appraisal management companies?
ie Countrywide-Landsafe, Wells Fargo-Rells, Wachovia-WSS charging appraisal fees on the HUD 1 of $400-$600 and paying the appraiser $200-$300.
Other examples are suspect BOA-Quantrix, any lender using EappraiseIt, LSI, Valocity, Forsythe the list goes on!
Conversation with attorneys indicates apprehension as various District Courts have differing view points?
Aaron- I did not compare section 8 with anything. The post was all about section 6 RESPA and I just included a full excerpt from HUD on all the sections.
There is not always specific break downs, rubbish, BS.
This information is from some of the best foreclosure defense attorneys in the country.
Obviously you do not know what you are doing and of you attempting to be of service you are being a disservice or you work for a lender/servicer or are an executive at Countrywide, Mozilo himself or something and you DO NOT want this information getting out to the general public. One of the two.
maverick – I would say yes, to me that would throw off the APR because that is a lender paid fee or kickback that is non-disclosed. APR’s off and now you have a TILA violations and possible loan rescission.
But how can we prove that these fees were paid? Can you or do you know where we can get proof?
Nick – servicing the lenders as intermediaries is not illegal. The fees are for services, third party appraisal originations in which they are the go between for the appraiser and the Loan Originator. You’ll find on the Affiliated Business disclosure the name of the entity if it is providing a service and connected with the company originating the loan. The secondary market is pushing hard to have these intermediaries as losses pile up due to overvalued appraisals. Also normally these companies will charge similar costs to normal appraisals because they get the appraiser to work for cheaper than they would if they were not associated with this intermediary.
Moe – So easily we can listen to attorneys but not hear what they are saying. Good luck to anyone who is reading your, I believe you put it like this, rubbish(You British? na, didn’t think so)
Section 6 of RESPA is no more than a servicing clause for disagreements between lenders and borrowers. The fees charged at default are one thing the fees charged to originate is completely covered in a different section as I pointed out.
You are telling people to look at section 8 overcharging of fees when they are in default. This is why I disagree but your to easily going to trump that I’m an idiot instead of follow your misguided information.
Was only trying to give a lenders perspective with some accuracy but I can tell your more likely friends with Tort Attorneys.. Good luck on your quest.
Aaron – Did you read the post. Really? It was about borrowers being charged questionable fees and to request that these fees be documented if they have not already done so.
You came off at me sideways in the first comment right from the start. You could have made your opinion in a more friendly non condescending manner, but you didn’t. so……….. thats how I will respond.
Do you know how many disagreements happen between a homeowner and their servicer? It’s a lot. I have over 400 people in my forum that would agree with me and maybe another million plus homeowners who have been charged or mislead by their servicers.
I did not tell them to look at section 8. I just copied and pasted the whole section from HUD as you can tell if you follow the links. Hell, maybe they need to be informed about section 8, 10 etc.
If they read the post they will se what section 6 says, what section 8 says and they can understand what section may apply to them.
You are acting as if people can’t read and I am taking advantage of that.
But you did give some good tips, I’ll give you that. We disagreed (such is life) and I can be an ass and it looks like you can too, so swell.
Have a good one and best of luck to you.
Good post, Moe. I like your style.
Interesting…..thanks for the invaluable info, Moe.
thanks ya all…..
Most lenders give you the fee break down with the repayment plan. They\’e2\’80\’99re usually very specific. — As a homeowner, a layperson, unfamiliar with the industry I will say this: What may be considered “specific” to a seasoned professional of the industry is just GREEK to an average borrower. Just because it’s there, and outlined doesn’t mean it’s understood and that’s where the LO and/or MB comes in. THey are charged with explaining these charges to the borrower.
Same with a default. All charges should not only be broken down and detailed, they should also be EXPLAINED in plain English that everyone can understand.
edited for being an idiot by moe
whatever alan, damn slimy pig, how’s that
In your article you make several statements that could use some clairification.
To summarize your fictional situation on a borrower who is being taken advantage of by his servicer you state,
“Welcome to business as usual in the mortgage servicing industry.”
To summarize your answer to the question,
So, how do lenders and servicers get away with charging these bogus fees? You state,
“This is exactly what is happening in probably 99% of the loans that are modified, on repayment or forbearance plans.”
I find it interesting that you present no actual instances of this alleged wide spread and rampant practice and more interesting that when one takes the time to read your fine print you are in the business of working with borrowers on loan workouts.
Your screaming fire and selling water. Shame on you for trying to pour gasoline on the fire to find business.
Lee- another drive by commentor that is misinformed crapping on my blog.
you say – “when one takes the time to read your fine print you are in the business of working with borrowers on loan workouts.”
I give away and have given away my services for months. Hours and hours of emails, calls, helping people in my forum etc. I have helped people fight back against their lenders and save their homes. I know what is going on in the servicing industry and I know that servicers are charging bogus fees. And so do the homeowners that read my blog. They are the instances of this abuse and they know who they are.
I work for a comany that does not charge borrowers for loan workouts called MIZNA. They are a third party loan modification out sourcing company for lenders and lenders PAY MIZNA to help poepl stay in their homes.
Next time do a little more due dillegence before you come and comment rubbish on my blog.
You are just another lender executive or head hauncho that is trying to dis-credit me because I am getting accurate and timely information to homeowners so they can FIGHT back against predatory business practices and their lenders.
FYI Homeowners – I could delete these comments in 1/2 a second, but I am not scared of what people say or comment about me because I stand by what I do 110% and I have nothing to hide and I leave it all out on the table for EVERYONE.
Moe,
It’s sad that you feel you have to resort to Hannityesqe accusations about my motives and beat your chest about your motives.
I would still like you to respond to my primary point about your posting tactics. By respond I don’t mean try to attack my motives without answering the issue.
From my previous post.
“I find it interesting that you present no actual instances of this alleged wide spread and rampant practice and more interesting that when one takes the time to read your fine print you are in the business of working with borrowers on loan workouts.”
You are in the business of loan workouts. That is a correct statement.
Do you get paid for your services? Yes?. You have not given any valid statics or documented cases of this “widespread and rampant practice” Please provide.
In your reply you said,
“You are just another lender executive or head hauncho that is trying to dis-credit me because I am getting accurate and timely information to homeowners so they can FIGHT back against predatory business practices and their lenders.”
I am not a residential mortgage executive / head honcho. I am a commercial lender. I have no axe to grind other than trying to get you to step up and present valid proof of your wild claims of “This is exactly what is happening in probably 99% of the loans that are modified, on repayment or forbearance plans.”
Please address the questions I pose, I hope you do not start waiving the flag next.
Thank you in advance for giving an honest and direct reply to my questions about your post.
Lee W.
It’s funny as I always get negative comments from lender industry people. I was right, you are a lender. Residential or commercial, don’t matter. I was right.
You all then leave condescending comments and leave. I’ll puff my chest and say whatever I want on my blog Lee. I am passionate about what I do and I do not play Mr. Nice Commnetor with your type. If that comes off has me pounding my chest, then fine, I do not care.
This blog is for homeowners to discover what really goes on in the mortgage industry and not to satisfy “lender” comments or debates.
I haven’t made a dime from homeowners or MIZNA. We are expanding are operations and it may not work here on the West Coast.
OK, Lee, you know who I am. You are a commercial lender? Please inform me and my readers what lender you represent before I provide you with what it is you are looking for. Are you he president Lee or just an employee?
Moe,
I’ll let my questions stand until you answer them.. I doubt you will.
Instead you did exactly what I predicted. Avoid the question by trying to argue with and try to insult the poster.
Next I predict that instead of answering the valid questions I have asked several times you will continue to do everything but answer my request to please provide proof.
“You have not given any valid statics or documented cases of this \’e2\’80\’9cwidespread and rampant practice\’e2\’80\’9d Please provide.”
I guess I thanked you too soon for giving an honest and direct reply to my questions about your post.
Lee W.
Moe
A brief resume: I am the Owner/Broker of a Mortgage Co doing business in 5 Western States, Including CA (your West Coast). 40 years in Banking and Brokerage of residential mortgage loans, including positions from origination to President of a Regional Mortgag Bank to EVP of a nation wide lender and long stints in Secondary and loss mitigation. Long time Board Member for major financial institutions and long time member of both NAMB & MBA. I am not an attorney; I hire the best around me to deal with legalities and consulted them prior to this post.
That said, here’s my take: Sect 8 & 9 are meaningless to your discussion. They have NOTHING to do with charges related to servicing or default issues. Sec 6 pertaining to servicers sets out the rules they must follow in handling a borrowers payments for both P&I and escrow deposits, notifying them of changes to their account and changes to the servicer when a loan is sold, and informing them of charges to their account as prescribed by the Law and the terms on their Note and Deed of Trust or Mortgage. It DOES NOT regulate the dollar amount a servicer can charge for the cost of recovery from default or forclosure. It DOES suggest that these costs be ‘reasonable’ within the marketplace. It also requires that these costs can not be inflated beyond ‘actual’ costs incurred. Thus, if the servicer orders a Title Report to see if there are legal issues beyond thier foreclosure, they can charge the borrower the actual cost of the report. The same for an appraisal, whether from a CBA/ABA or independent appraiser. Same deal – recover actual costs. Legal fees incurred are recoverable at actual cost. Whatever the Attorney charges can be recovered from the borrower.
There have been a number of class action suits brought and won under Sec 6. However, none have been related to overcharging for default services. After all, the fact is most people facing forecloaure have historically not succeeded in keeping their homes, thus they never paid these charges. Those lucky or resourcefull enough to redeem their home, whether by paying the back payments and fees or negotiating a modification or forebearance, must and should live with the cost consequences they agreed to when they signed the Note and DOT. Agreeing to the amount to save thier home does not stop them from filing a complaint with HUD after the fact. If they feel they were overcharged, I would encourage them to do so.
Keep in mind that, as a life long Mortgage Industry Professional, I appreciate what your segment of the industry does; try to keep people in thier home. Bottom line from my perspective though is that your Blog is an advertisement for your services more so than a chance to ‘puff up’ under the banner of homeowner advocate. As such, ‘truth in advertising’ principals should be applied. I feel that is the point being made by other responders. So I would suggest sticking to your guns as you have reflects a ‘don’t confuse me with facts, my minds made up’ attitude that isn’t playing well with the industry. I’ll assume your potential clients will like it, though. Thier back is against the wall.
If you and your Company think what is being charged is too much, encourage your clients to have you negotiate a lower figure, which I have found is generally met with little resistence by most servicers, the altenative being they get the property back. Invoking Sec 8, 9 or 10 of Respa as a basis for soliciting clients looks like a scare tactic.
Lee W. and Bob G.,
You all are “trying” to make me look bad because your scared with the information I am disseminating on the internet. I know this, you know this and the homeowners that may be reading this, need to know that.
This blog and my forum tell it like it is. It’s for homeowners and not lenders. This is my voice to the American people based on what is “really” going on in regards to loan modifications, loan workouts and the servicing industry.
What started as me filling a need on the internet, has turned job offers and funding. It has not been much but I have no problem helping people save their homes and getting paid by other people to do so. There are a lot of wealthy people that are in support of what I am doing and it will get much worse for lenders if they do not shape up their servicing abuses.
I have no problem getting 5-10 emails and posts on my blog or forum, from homeowners, thanking me for helping them. Many have given credit to me and my website for helping them save their homes.
I did not make a dime off of them. All I did is give them the information that I have and researched. I share what I know on my blog and my forum.
I spend 60 hours a week volunteering to this cause.
I find it quite perculiar that out of all the posts I have done here, this is the only one where all of a sudden, 3 industry hot shots want to challenge and debate me.
One has to wonder why you all are going out of your way to comment on my little ol blog?
I mean come on, it’s not as if you both are in the business of helping homeowners save their homes or are consumer advocates.
You are trying to discredit me by challeging me with your smooth comments.
Again, homeowners I can delete these comments and spend my time helping real people, but I don’t to prove that they are trying to SILENCE me.
Bob G. – Section 8,9 and 10 of RESPA were just included in there based on me copying and pasting from the HUD website. People can read and see if that applies to them or maybe in the future. I already addresed this and debated this in earlier comments with another lender exec or whatever.
The post was about section 6 and yes, A LOT of borrowers have succesfully brought suit against lenders for erroneous fees and bogus charges. You said it yourself and that was what this post was all about.
Lee – Do you see one of your peers here that just said that there have been several class actions won by borrowers. Just FYI – They were for bogus fees……………………………..
Moe – quit imitating O’Reilly and answer the question…
Moe,
I\’e2\’80\’99ll let my questions stand until you answer them.. I doubt you will.
Instead you did exactly what I predicted. Avoid the question by trying to argue with and try to insult the poster.
Next I predict that instead of answering the valid questions I have asked several times you will continue to do everything but answer my request to please provide proof.
\’e2\’80\’9cYou have not given any valid statics or documented cases of this \’e2\’80\’9cwidespread and rampant practice\’e2\’80\’9d Please provide.\’e2\’80\’9d
I guess I thanked you too soon for giving an honest and direct reply to my questions about your post.
Lee W.
I have to chime in here.
Moe is right.
The mortgage servicing industry is rampant with fraud and predatory practices. It has been that way for ages and it coninues now, with even more vigor than ever.
One of the most prevelent predatory practices I have personally witnessed on several cases were lender forced insurance policies on a homeowners properties. The lender claims they have not received proof of insurance and then force the owners to pay extra every month for the policy.
Often, they place the insurance without informing the homeowners, who make their regular monthly payment, which is first applied to the policy and then to interest and principal. This makes them late on the bill even though they are paying on time every month. Faxes to the lender of proof of insurance will not convince them, if they confirm receiving the documents at all. Homeowners may only learn of the insurance policy when they are being sued for foreclosure, and assume that a horrible mistake had been made.
Another way that mortgage servicing companies push properties into foreclosure is by paying the property taxes late and charging the late fees to the homeowners’ account. The next payment the homeowners make will be applied to the taxes and late fees, while the principal and interest will be partially late.
Again, the foreclosure victims may not realize the scam until they are being sued and their home is scheduled to be sold at a county auction. Even then, they may have little idea of how to defend themselves in court against a company with thousands of successful foreclosures behind it who has hired local attorneys that specialize in such cases. The loss of the home may be all but guaranteed at this point.
These are the two most common ways, in our experience, that servicing companies have been known to force homeowners into foreclosure. The deviousness of the scam, combined with the bureaucratic inefficiency of many of these companies, often create the impression that errors have been made that can be corrected, as long as the homeowners can talk to someone, explain what happened, and straighten out the mess.
Unfortunately, customer service centers may be specifically designed to delay the homeowners as long as possible, leading them to believe they are working out a solution, while the attorneys proceed ever more quickly to the foreclosure auction.
Even more unfortunate is the fact that homeowners have little alternative when they become a victim of this scam. Once they are behind in payments or in foreclosure, the servicing company will make absolutely sure that the balance due on the loan strips the property of its equity.
This also dramatically decreases the chance of qualifying for a foreclosure loan or other solution, and increases the amount necessary to begin a repayment plan with the company. A house with little equity can not even be sold quickly enough to ensure that there will be any equity by the closing.
The servicing fraud scam is one of the most disturbing in the industry, and one every homeowner should be aware of, because the power of the perpetrators so outweigh the victims in terms of money, legal expertise, and previous successful cases.
Over the past years working with foreclosure victims, it is always amazing to see the complete incompetence of mortgage lenders. When working with these homeowners, foreclosure case workers or loss mitigation representatives go to nearly any lengths to avoid helping their clients. It seems they do anything possible in order to delay a resolution, instead allowing the home to get dangerously close to the sheriff sale before turning down the workout program entirely.
In cases where the homeowners are facing the loss of their homes due to negligence or fraud on the part of the lender, the incompetence is especially frustrating. Our observations over years have alerted us to a few of the various ways that banks push paying customers into foreclosure in order to steal the home and extract the largest profit possible at the expense of the homeowners. This type of scam is mostly perpetrated by servicing companies and operates in several ways, all of which we have witnessed numerous times.
Homeowners in these and similar situations may feel as if they are the only ones caught up in some kind of Kafkaesque debacle. The lenders play the part very well through their own genuine incompetence at the customer service level. Remaining on hold for three hours a day just to confirm that a fax has been received (when it had not been received any of the previous three times it was sent) is a simple tactic resulting from understaffed loss mitigation departments and increasing foreclosures. But more and more experience and research shows us that these are not isolated events, but carefully planned manipulations of mortgages, resulting in forced foreclosures.
Finally, 2 people who know what they are talking about and can validate to homeowners what is really going on out there.
The fun has just begun Moe. Bring it on baby….. your my hero
Mortgage lenders ordered to pay $99 million in punitive damages
By DAN MARGOLIES
The Kansas City Star
A Jackson County jury Friday ordered three mortgage lenders to pay $99 million in punitive damages to Missouri residents who claimed they were charged illegal fees for second mortgages.
The jury, which had assessed $5.1 million in actual damages against the three companies earlier in the day, reconvened in the afternoon and handed down the punitive damage awards. Collectively, the awards are among the highest assessed by a Jackson County jury in recent years in a commercial case.
The mortgage companies \’e2\’80\rdblquote Residential Funding Co. LLC, Household Finance Corp. III and Wachovia Equity Servicing LLC \’e2\’80\rdblquote bought second mortgage loans from a lender that had charged excessive interest and illegal origination, loan discount, underwriting, processing, document preparation and legal fees under Missouri\’e2\’80\’99s Second Mortgage Loan Act. The plaintiffs claimed that the companies knew of the lender\’e2\’80\’99s fraudulent conduct and \’e2\’80\’9cstepped into its shoes.\’e2\’80\’9d
Missouri\’e2\’80\’99s Second Mortgage Act limits the types and amounts of fees that can be charged in connection with high-interest second mortgage loans.
The defendants argued that they were entitled to rely on the originating lender\’e2\’80\’99s assurance that its loans fully complied with state law.
The originating lender, Mortgage Capital Resource Corp. of California, is no longer in business. Its former chief executive, Kenneth C. Ketner of Newport Beach, Calif., was sentenced last year to 57 months in prison for mortgage fraud and ordered to repay banks he swindled $9.27 million.
Hit hardest by Friday\’e2\’80\’99s jury\’e2\’80\’99s verdict was Residential Funding, which is owned by GMAC Mortgage Group and was ordered to pay $4.33 million in actual damages and $92 million in punitive damages.
\’e2\’80\’9cI think the jury felt that Residential Funding really enabled the conduct in question,\’e2\’80\’9d said attorney J. Michael Vaughan of Walters Bender Strobehn & Vaughan, which represented the plaintiffs.
A spokesman for Residential Funding, Stephen Dupont, said that the company was disappointed by the jury\’e2\’80\’99s decision.
\’e2\’80\’9cWe believe the punitive damage award is unwarranted and out of line considering that our company acted consistent with industry practices,\’e2\’80\’9d he said.
\’e2\’80\’9cTherefore, we plan to appeal. The loans in question were originated by Mortgage Capital Resource and deceptively sold to our company. Residential Funding Co. promptly severed its relationship with Mortgage Capital.\’e2\’80\’9d
The jury also ordered Household Finance to pay $420,489 in actual damages and $4.5 million in punitive damages. Wachovia Equity Servicing was ordered to pay $374,957 in actual damages and $2.5 million in punitive damages.
Lawyers and officials with those companies could not be reached for comment.
The case was filed in 2003 by Blue Springs residents Steven and Ruth Mitchell and St. Louis resident Judith Pickerill.
The Mitchells obtained a 15-year, $21,000 mortgage loan from Mortgage Capital, according to the lawsuit. They said they were charged 10.85 percent interest and $2,850 in upfront fees.
Pickerill obtained a 15-year, $29,600 loan. She said she was charged 11.6 percent interest and fees totaling $2,551.
Because Circuit Judge Justine Del Muro certified the case as a class action, other Missouri residents who obtained second mortgages from Mortgage Capital Resource will be eligible to share in Friday\’e2\’80\’99s damage awards. Vaughan said his information indicated that a total of 324 Missourians qualified as members of the plaintiff class.
Mike ESQ / Foreclosure Fighter – please go back and read my post..
I have asked Moe a number of times to back up his assertion that servicing abuse is rampant and happens “99% of the time” your posting are your opinions – you did not present one fact. Please provide proof not agreement.
Joni – thanks for the info – but the examples you site are not servicing related they are about overcharging on origination fees. This is a completely different issue.
From your post
“second mortgage loans from a lender that had charged excessive interest and illegal origination, loan discount, underwriting, processing, document preparation and legal fees under Missouri\’e2\’80\’99s Second Mortgage Loan Act” – your other examples are also “origination” problems.
Just admit it Moe.. you are trying to sensationalize an existing problem by greatly over amplifying a problem for your own self interest. You cannot back up your statements with facts. Only accusations.
I don’t think asking an “expert” to back up his claims with facts and real examples is to much to ask. Apparently you do.
Lee W.
Insurance coverage requirements are explicitly and plainly outlined in mortgage documents. The bank will obtain insurance coverage for borrowers failing to maintain adequate coverage, and will add the cost of coverage to the loan. This isn’t some devious or deceptive scam, as those posters above would want you to believe. Did borrowers read their mortgage documents? Could they read? Why are we absolving all borrowers of their responsibilities to read their mortgage documents and understand the risks they are assuming when they sign? Do contracts mean anything anymore?
This is another example of politicians rushing (see chuck schumer) to the next popular cause (68% homeownership rate) year without considering the long-term effects of the bailout efforts recently announced. The effects of high and rising foreclosures and a fallout from the residential real estate market more generally have a pervassive effect on the economy and peoples’ quality of life. But a price correction is long overdue. House price appreciation has far outstripped income growth and was unsustainable for too long. see the below listed article.
http://homeguide123.com/articles/Foreclosures_are_a_Symptom%2C_Home_Prices_are_the_Problem.html
MOE !!!! I’ll expand on the resume: I am a Voluteer Housing Counselor for ACORN in my spare time, dealing with all manner of housing issues for the needy, including foreclosure. My Company, through the local Chambers of Commerce and our network of Realtors, offers free guidence, including direct negotiations with lenders, for the renegotiation or workout of problem loans. We do not charge the homeowner, nor do we get paid by the lender. We feel it is our responsibility to give of our time to those in jeopardy of loosing their home. We are achieving succes at a an average rate of two resolved cases weekly, the majority being a freeze on current rates and extension of adjustment terms on 2/28 and 3/27 ARMS. IN EVERY CASE the servicer has waived the accrued fees and deferred the delinquent interest, to be added to principal at the next adjustment, usually 60 months out.
In addition, my Company powers a Veterans Housing Network in every state that we do business. This network of Realtors, Title Companies and Lenders fight for adequate and affordable housing solutions for Veterans (I am one) and Active Military. The participating Companies, including mine, commit to donating 35% or more of thier income, if any, from the resulting transactions made to these Vets back to Veterans Charities. I am the Executive DIrector of the Network. My annual compensation for this task – $.00. NOTHING, NADA, ZIP, ZILCH !!!! Oddly, I spend more time working on other issues for Vets, mostly Disability claims, than on Housing.
You, on the other hand, get paid for this help. I don’t quibble with how you make your living, but don’t assume, and preach, that Industry Pro’s are only out to screw the consumer. It makes you look bad without any help from me. Re-read the portion of my post regarding class actions. It clearly states that suits have been filed, NONE of which regarded over charging for default fees.
Mike ESQ !!!! I’ll assume your JD is from a legitimate institution and not through the mail. I could be wrong. In any event, it is clear you are not well versed in Mortgage matters. A few points:
The ‘controlling document(s)’, as attorneys like to refer to them, in a loan servicing dispute, is/are the Note and Deed of Trust or Mortgage, depending on State Statutes. THe servicer is bound by it’s terms as to how to apply funds and how to adequately protect thier interest. In virtually every case, the Borrower is responsible to insure the property against hazard that could deminish the security interest the Lender holds. If they fail to do so, even unintentionally, the lender has the right, indeed the obligation, to insure the property. The coverage most often selected, as you well know being a legal eagle and all, is called Vendors Single Interest or VSI for short. The cost of this coverage is excessive since there is no underwriting for compensating factors. THe cost of this is passed on to the homeowner because they failed, for whatever reason, to maintain coverage on the home. Perhaps they changed Companies and didn’t tell the servicer. Perhaps the bill came due when they were already behind in thier payments and the policy lapsed. IT DOESN’T MATTER. THe note requires the property be insured, thus the service insures it. Where you wander from the path of rightiousness is here: THe note and DOT virtually always require that payments received from the borrower be applied FIRST to INTEREST, then to PRINCIPAL and lastly to late fees and escrow items. The lender/servicer CAN NOT reimburse themselves for VSI and then apply the rest to PITI.
As to paying property taxes late and charging the late fees to the homeowner, Lenders are also precluded from doing so, UNLESS the funds were not paid to them by the homeowner in a timely fashion. THis assumes that an ‘escrow’ or ‘impound’ account is in place for the collection of these items as a part of the regular payment. Most class action suits brought under Respa, including against Household and Ameriquest, revolved around these type issues. BOth lenders lost at trial, as they should have.
Last, but most important from my perspective, is your contention that Lender/services are using ‘devious scams’ to steal peoples homes. Having worked for, managed, controlled or owned Mortgage Companies from local to national reach, the last thing I ever wanted to own was a house through forclosure. In 40 years of personal experience and 40 years of industry experience, I have never, nor do I know any lender who has, made profits on REO. I’m sure there are a few unscrupulous players in the back woods of your niegborhood who ‘Loan to Own’, but the rest of us, from Countrywide on down, have no interest in owning foreclosed property.
So back to school for you for a refresher course on Mortgage Lending Law. You clearly need it.
FIGHTER!!!! Is it your contention that Kafka, as well as everyone else facing forclosure, would get a pass in your financial world? Never mind that they signed an agreement that as long as they make the payments, they get to keep the house.
To portray them as ‘VICTIMS’ clearly displays your bias. NONE would be in forclosure had they kept thier end of the bargain. Once that line is crossed, regardles the reason, thanks to the likes of Mike ESQ and his Band of Brothers who have created and profited from the litigious society we live in, the current in the Foreclosure River is very strong.
As I’ve stated, I volunteer to help people fight thier way back. I would hope you do the same. If not, shame on you. We can only hope that ESQUIRE does a sufficient amount of Pro Bono for those who need the most help and can’t afford it.
Ha, ha!!!! Ha, ha, hoooooooo, heeeeee, ha, ha!!!!! This is what I read the lenders who come on here saying:
Don’t confuse me with the facts!!!!
HIL -LAR- RIOUS!!!!
Lee & Bob = Dumb and Dumber
What you worried about the Karma police knocka knock knocking on your door? Is that why you “volunteer” for Acorn now Bobby. Been involved in the direct destruction of too many lives Robert with all the loans you have overseen.
Why don’t you take your lending slimy ass and your buddy Lee’s and go somewhere where they care what the hell you scum has to say. What Cathloic confession hall or something?
Moe,
Which fees are you disputing?
Attorney Fees and Costs for a foreclosure action?
Property inspections?
BPO?
Late Charges?
NSF?
Which fees….lets talk specifics and not vague generalizations. I’m a default servicer who works with hundreds of customers a month so I have a little understanding of the issues that Moe is complaining about.
I did send a RESPA letter to the mortgage company. I also sent them proof in the form of statement balances that showed plenty of funds to cover payment even though they charged me insufficient funds fees. I also sent them a copy of their statement showing they received payment on time and they charged for late payment fees. After 6 months of having to send the same evidence and receiving many generic letters, I still haven’t been reimbursed. I also turned the mortgage company in to the Office of RESPA and Interstate Land Sales to no avail. I guess they just get to keep my money because I can’t afford a lawyer and I’m sure the amount is too small for any attorney to be bothered anyway. Nice System!
I have a unique situation. I was a victim of subprime lending and I sued New Century. The day before they filed chapter 11, they transferred my loan to OCWEN. They failed to give me the required 15 days notice under respa. Letter was on New Century Letterhead mailed in an OCWEN envelope. Ocwen says they are not responsible for New Century’s failure to provide notice. I say the transfer is invalid. NC is protected under the Automatic Stay so they can’t be involved. I put a lis pendens on my own property. At the time Ocwen “acquired” my mortgage it was in active litigation and default. Any ideas? I can’t find litigation to support. Any help would be appreciated.
Leslie, call the Marshall Rosenbach at 310-860-4764
To Bill & Lee W.
I see this site as giving information. If a person chooses to give moe money or he recieves it from where for giving us this info……. GREAT. Major work has gone into this site and he gives way more information than I could get otherwise. If your going to start putting up sorry ass comments and try to bring negativity to this site then, GET YOUR OWN DAMNED WEBSITE!!!!
And do it there. I seriously doubt that you will get the kind of traffic that Moe gets here. Another thing, I don’t see your stupid asses giving us better information than Moe has only trying to bash what he’s freely given. Seems to me that you and your kind are still floating around causing chaos and dissent. Go back to your bosses and tell them your DISINFORMATION PROPAGANDA aint working. You 2 are just plain MORONIC if you think people don’t want this information.
Red I second that !
Lee W. & others you are always welcome to post your opinions and thoughts MOE allows everyone the opportuity of their voices being heard. but if you are so negative & disagree so much don’t come to this blog… we are here to find solutions and learn from each others successes and failures.
Most of us are here to help Pay It Foward, I for one am extremely grateful for the information MOE and others have provided here. I could have never received this information, not even in college, nor if i would have gone to one of those 3 day weekend courses to become a mortgage Broker.
Loanworkout.org & loansafe.org are wonderful !!!!!!!
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