Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Sara
I was reading another forum (unrelated) and saw this post.  Can this actually be done?  Has someone found a way to even up the score with the fraudster bankers?  Just wondering...

My neighbor just shared with me that he'd had his house refinanced. And then, he bragged that they'd been in the house for nearly a year and he'd never made a payment.

He "bought" it to save it from foreclosure....and then fought the foreclosure with the friend he bought it from. Then, he made a low offer...then, a little higher offer....four offers, with four or five weeks in between....then an offer was accepted. Then, he started the mortgage process....and then....refinanced before it was finished before it was done for a lower rate.

I have no idea how anyone knows how to work the system like that.....but, he's lived rent free for a year....in a house he's now purchased for nearly $135K less than it was built for...(He could be lying, by the way.....but why bother?)

And we've just gone on making our payments like the stupid middle class people we are.....
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4 Justice Now
Hello Sara,

I believe that's part of the over all problem. As long as there's a system, there will always be people who will learn how to scam it. The banksters have been doing it for centuries and we have been paying the price. Much of what we paid for our homes was an intentionally over inflated market price to begin with. What little equity there was, was quickly stolen, then the market tanked and the same people bought back many of those homes for pennies on the dollar. No matter which way the market goes the banks will always make out because they control the market and they have learned how to take advantage of both the ups and downs.

Those of us who possess a heart, a sole and a conscience would find this lowly existence unbearable. After all taking advantage of another person's misfortune simply because you can. To take something that is clearly undeserved and turn someone else's hard work it into your own gain and profit only because you just may be one of the very few who are so truly heartless and totally devoid of any sort of pride and/or morals and that won't be totally disgusted by your own image. No, you and the many others like you are here because you do have a heart, a very big and good heart, a sole and a conscience, even though I know there are times that we would all like to set our conscience and morally aside temporarily and blast all the ebreys, faris's & litton's straight back to the hell they climbed out of.   

But again that's just my own opinion.

V/r,

4J
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Dear Sarah,
    What he did, was essentially a "loan mod". It is easy to do in a down
market but virtually impossible in an "up" market. It is essentially a "short
sale".
     Obama is trying to "jaw bone" the servicers into allowing this without
the necessity of a "foreclosure action" but the servicers are dragging their
feet, so to speed up the process and conserve cash, some people just stop
making their payments so they can settle it in mediation at the court house.
     When a person has a buyer who is willing to assume the mortgage, and
the servicer says "no" because of the prospective buyer's credit score, the
technique you outlined could be a way of getting the deal done. The servicer
will turn over the negotiations to an attorney, who will try to get the best
deal possible for the Note holder, based on market conditions. The note holder probably does not want the property in any case, and is willing to take
a "hair cut" on the Note. All this does is jam up the Court dockets with cases
that could have been settled out of Court.
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Sara
You know, it's people who do this type of crap that messes things up for everyone else!  Let's scam the system for all it's worth.

Well, some would say the same about me.  I refuse to leave my home until they physically throw me out and then still, I am losing thousands of dollars in equity at today's market value.  I have sat here not making a payment for over a year.  But when I tried to pay, when I was only 3 months  behind, they didn't want my money...they wanted my Taj Mahol! 

And it really ticks me off! 

S
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Mortgage Scams in a Weak Housing Market

Fraudsters will always finds ways to scam lenders and homeowners. And in recent years, they've shifted their tactics to profit from the market's downturn.

Today, there's less identity fraud and misrepresentation of income or employment to obtain a mortgage, mainly because of stricter validation criteria, says David Johnson, vice president of fraud and consortium solutions for CoreLogic, a provider of financial, property and consumer information. But other types of fraud are replacing those scams. Here are three:

Phil Marden
1 Foreclosure Rescue

Schemes that prey on struggling homeowners heading toward foreclosure are "the cash cow right now," says Yolanda McGill, senior counsel for the Fair Housing and Fair Lending Project of the Lawyers' Committee for Civil Rights Under Law.

Some fraudsters are peddling services such as preparing documents for a loan modification. Others claim to be an attorney or say they are working with an attorney. Often, these offers sound legitimate, echoing some of the same language used by government programs and lenders to gain a homeowner's trust.

They offer a service, take the homeowner's money, then disappear, Ms. McGill says.

The Mortgage Assistance Relief Services Rule, in effect since January, prohibits firms that offer mortgage modification or mortgage relief assistance from accepting upfront fees, Ms. McGill says. So homeowners should never pay before services are rendered. There's an exception for attorneys, causing some scammers to pose as representatives of law offices, she says.

Other scammers try to get homeowners to sign a quit-claim deed, which transfers ownership of the home to the scammer, who promises the homeowner a situation where he or she will be able to remain in the home, Ms. McGill says. In a newer scam, those who have already lost their homes are being approached to pay money to get the home back, she adds.

2 Short-Sale Fraud

A short sale can be a lifeline for a distressed homeowner heading for foreclosure. That's because in a short sale, the lender accepts a mortgage payoff that's lower than what the homeowner owes. But fraudsters have found ways to make a profit off these deals.

One of the most common forms of short-sale fraud happens when a seller or someone representing a seller doesn't submit the best offer to the lender. A middleman buys the property at the lower price, then turns around and resells the property to a legitimate buyer at a higher price—often on the same day—according to a recent Federal Bureau of Investigation report on mortgage fraud. The middleman pockets the difference, sometimes sharing it with an accomplice.

Some fraudsters are real-estate agents marketing themselves as "short-sale specialists." Title companies and settlement agents may be in on the scam, too, says Robert Hagberg, lead fraud investigator at Freddie Mac.

Sometimes fraudsters will try to manipulate the price lower by encouraging the homeowner to make the house look worse than it is, referred to in the industry as "reverse staging."

3 False Payoffs

Another scam is when the title or closing agent doesn't remit payoffs as he should, Mr. Hagberg says. An example: "You refinance your mortgage, the refinance closes, you go on your way and make payments to the mortgage company, but your title company hasn't remitted payoffs to the old company."

Fraudsters take funds for their own use, and it can be 30 to 60 days before evidence of the scam is found in the public record.

Write to Amy Hoak at amy.hoak@dowjones.com

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