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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I am very skeptical about all these loan modifications being offered by just about everybody. I suspect that the true motives behind them are NOT to help the borrower at all but to get 1) financial information about the borrower in order to know how much can be milked from them before foreclosure occurs and 2)a chance to get borrower's signatures in case the servicer needs to "produce" documents for legal cases. My gut feeling is that both motives apply in most cases.

Tread very carefully when any servicer tells you it wants to "help" you. It seems that the end game is still to enrich themselves while "helping" borrowers into BK!

Check this out:

Countrywide/BofA - A Direct Threat to Borrowers & Shareholders

Posted on September 3rd, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage's Personal Opinions/Research

I am infuriated.  You will not believe this story.  This sure looks as though Countrywide/BofA has conspired to deceive a homeowner and shareholders.  They are getting these borrowers at their weakest moment with a plan that is portrayed as ‘help’ but will ultimately lead to disaster.  This is much worse than stated income, no doc and no appraisal loans were in the first place. WHERE ARE THE REGULATORS!  If you can’t see this train coming down the line in 5-years you are blind.

For those of you who do not believe the housing and mortgage implosion will be around for years, here ya go. I can talk about subprime being the proverbial ‘canary in the coal mine’, default rates, loan loss reserves, max-neg caps, Pay Option ARMs, cure rates, capital ratios, write-downs, Alt-A, Jumbo Prime and the GSE’s faulty underwriting systems until I am blue in the face, but none of these things seem as overwhelming as this story.  I understand and can quantify the prior list of threats.  Countrywide has taken this to an entirely different level.  

Meet The New Game in Loss Mitigation - Put it off for 5-years with 2% rates and 200% LTV workouts; make the borrower sign away their life waiving all future claims; then tell the shareholders it is ‘performing’. In 5-years this will bury the borrower beyond all recognition and force them into bankruptcy, but until then ‘problem solved’.  WHERE ARE THE REGULATORS!

  This is a true story that happened last week.

This borrower has an $800k Pay Option ARM obtained in 2005.  Last month they hit their max negative cap of 115% and their payment went from roughly $3k per month to $5k per month.  The total outstanding balance with the accrued negative amortization stood just above $900k. The home is now a rental and the gross rents are roughly $3k per month.  The borrower moved out a few months back and are now renting closer to their jobs. The home is currently worth $515k according to Zillow.

They called Countrywide for help. Boy, did Countrywide help…helped themselves.  

Countrywide immediately sent them documents making the new monthly payment less than $1600 per month by giving them 2% interest only for the next 5-years. At the end of 5-years it returns to its original terms, which will be a fully-amortizing loan that must pay off within the remaining 23-years. At this point undoubtedly the borrower will default.  This 5-year ‘deal’ is far worse than an original 100% 2/28 or Pay Option ARM ever was.

The borrower received the documentation on a Friday and had to have them back by the following Tuesday or the ‘deal’ would be rescinded. The borrower also had to agree to waive their rights against any claims against Countrywide in the future for any purpose.  The borrower accepted  immediately.  Countrywide saved themselves by throwing the borrower under the bus.  WHERE ARE THE REGULATORS! They are too busy blaming everyone else and not doing their jobs.

 Essentially Countrwide:

  • Refinanced a $515k home with a loan balance of $900k
  • Put the borrower underwater by $385k in a pen stroke without recourse
  • Stuck the borrower in a home that they can’t sell or refinance
  • lured the borrower by using lo w monthly payments
  • Hid an ultimate default and subsequent foreclosure
  • Averted a 50% write-down and pushed out the loss indefinitely into the future

This is why homeowners should never manage their own mortgage modification. Investors should never listen to the banks with respect to their exposure either.  Banks are in such self-preservation mode, you do not stand a chance. Typical home owners have such little understanding of the market, interest rates, qualifying ratios, banks thresholds, the consequences of their actions or even of their own household balance sheet that a self-negotiated mortgage modification will end up looking like the one described here.  The consumer stands no chance. I am all for banks ’working out’ loans but this out of control.  WHERE ARE THE REGULATORS!

For those of who who did not read my mortgage modification posts a couple of months ago or watch the Youtube versions, please review. It could save your financial future. -Best, Mr Mortgage
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loan mods are portrayed as something to help the borrower......those of us that have been down that road know it is like being under the covers with a rattlesnake.

It's a facade to pacify regulators, media, investors etc., who for whatever reason won't look below the surface.

Loan mods are unconscionable, one-sided and many times unenforceable if challenged in court because the terms are so one sided. BUT none of that matters to the heartsick homeowner who is trying to save their home from foreclosure. Had my loan mod required I stand on my head and gargle peanut butter every 4th Tuesday of the month at precisely 2:27 am, I would have still signed it!

If I throw a drowning victim a lifesaver I'm helping him right? What if it's made of concrete? To an onlooker I did a good deed by trying to save him. I may get a few pats on the back and consoling the end it will appear to be the drowning victims fault for being in over his head. As for me and the dead guy we know it was my "help" that sunk him.

Lending, disclosure, and consumer protection laws go out the window when it comes to loan mods.....hopefully that will change as more and more people become victimized by this blatant mode of extortion!
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I too do not trust these offers of loan mods. We received a document from Residential Acceptance Network, Inc. Has anyone else received one of these documents? On the cover letter it says that MORTGAGE FUNDS ARE OFFERED THROUGH THE FUNDING POOL. THEY ARE CURRENTLY FLOATING AND ARE ABLE TO LOCK IN IMMEDIATELY.


It is very disturbing. The information they are asking for is are things such as a copy of the bank statement, current pay stub and w2's for 2006, 2007, AVM, Appraisal, Waiver Form, Final Acceptance From Designated Underwriter, Funds Secured with The Funding Pool. Then it states that; Funds are Currently Floating, rates are subject to change.

I was curious to know how many others received one of these letters. We do not intend to reply, I just wanted someone elses opinion about this as we are really thinking that it is just another scam in the mortgage mess. It states in the letter that it is not a government agency, but is an approved HUD lender. Anyone had an experience with this company?
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Arkgirl and Tired - you are so right to be mindful of modification...consider this as well.

Your loan servicer does not have your "ORIGINAL SIGNATURE"...they only have copies of the original documents from the lender...

MODs give them the opportunity to obtain your original signature so when foreclosure time comes... they don't have to go to far to search or find the original created one with them...

Stay away from them...

Also...have you ever been to a foreclosure sale that is done on the court house steps?

If not....let me explain what happens:

The attorney or someone from the office stands on the steps of the court house and starts to read everything that was printed in the newspaper on the property.

The full description of the home, the dollar amount...who they are foreclosing on behalf for etc.   They will start the bid at a certain amount, which is lower then what you owe according to what they wrote in the newspaper.

They will then say going once, twice...(and if no one bids on it, they then say) Sold to the lender...

Now what lender?   Do you mean the servicer that might be a lending financial institution?  But I thought it would go back to the holder in due course of the note?  

The attorneys claims that they are acting on behalf of the holder in due course and selling the home for that individual as well.  But what if the servicer is the one the attorney is acting on behalf for and you did not do a modification?   They don't have no damn beneficial interest and should not be foreclosing period....

My loan was with countrywide too...they were the servicer and I told them to take a hike/MERS. don't have any beneficial interest in the matter.

I filed a complaint at the banking and finance and FDIC...for fraud against my original lender Fremont... since Countrywide is not a fact witness...and merely the servicer...they quickly got out of the way...I haven't heard from Countrywide since when I sent a letter to the CEO...David Sambol,

Office of the President                     


I don't deal with the paper pushers...they are clueless to what truly goes on...but these VP and CFO...oh they know the deal.


So...again...MOD's primary focus is to pretend that they are helping you but they get a valuable thing...An ORIGINAL SIGNATURE...






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