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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j. cleary
Would like to know if anyone has had trouble dealing with EMC Mortgage.  I am due to refinance on a 5 yr arm effective FEB 1, 2008.  EMC Mortgage, however, will not let me know what my new rate will be.  They state that it will be based on the 1 yr Treasury Index for single family based FNMA + 2.75%.  That sounds reasonable but i would like to get the rate in writing.  They were supposed to notify me by mail as of 12/15/07 but I have received nothing and their customer service at 1-800-723-3004 is completely useless.  The people there stick to a tight script stating that there computer system gives them limited info and that they cannot direct me to someone who can help.  Feeling very frustrated and have a sneaking suspicion that they are going to hit me with a whopper of a rate come Feb1.  They are leaving me no time to refinance prior to that date.

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They don't know what the rate will be until the business close day rate is published.

GET OUT - refi as soon as you can if you're dealing with EMC.


Even if you refi into a higher interest rate, your chances of staying in your home will more than double if you get away from EMC.


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If, taking everything relevant to a refi into account i.e. credit etc., you feel that you could successfully refi out of your current loan before the reset, it might be wroth it to put a call in to your state banking department and explain to them what is going on.

While it is understandable that EMC may not be able to tell you what your NEW rate is going to be as of Feb 1, 08 (are you 100% sure you're TI based and not LIBOR?) there is absolutely no reason that I can think of that should prevent them from giving you an accurate amortization and payoff figure good until Jan 31, 08.
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Originally Posted by j. cleary  
They state that it will be based on the 1 yr Treasury Index for single family based FNMA + 2.75%.

There is a 1-year Treasury constant maturity index.  Your mention of a "1 yr Treasury Index for single family based FNMA" seem GARBLED.

You need to look at your PROMISSORY NOTE and your mortgage or deed of trust to find out the particular terms of YOUR promissory note.

A promissory note with a 1 Year Treasury Index PLUS 2.75% is generally a VERY REASONABLE and FAIR adjustable rate mortgage.  But there are also a  variety of other considerations to bear in mind in selecting an ARM or deciding whether to refinance.  These include periodic caps (2% annual caps are reasonable), the life of loan ceiling (start rate plus 5% to 6% is reasonable), the existence of any rate FLOOR (ANY FLOOR IS BAD), and whether your loan has any prepayment penalties.

Many participants at this message board have had HORRID experiences with EMC Mortgage, but in MY VIEW if you have a rate capped 1-Year Treasury Indexed ARM with a 2.75% Index, I would NOT rush to refinance.

There are overriding three considerations to bear in mind.  First, you can NEVER pick your mortgage servicer.  AFTER refinancing, there is NO ASSURANCE WHATSOEVER that you will NOT end up back being serviced by EMC!  So undergoing a REFINANCE only to get out from under a particular servicer is NEVER a good strategy.

Second, refinancing involves significant FEES.  You should refinance when there is a significant financial incentive to do so.  Whether to refinance should also be influenced by your time / investment horizon in the property.  By this I mean how long you EXPECT to remain in this particular property. 

In the limiting case, I am sure that you would agree that it would be FOOLISH to refinance if you were planning to SELL the property in six months.  Frankly, it is usually foolish to refinance if you are planning to part with a property within two to four years.  You can usually CALCULATE your BREAKEVEN POINT on a refinance.  You SHOULD DO SO before undertaking a refinance. 

Note that the advisability and desirability of refinancing is DIFFERENT where you are currently in a singularly UNECONOMIC sub-prime mortgage.  SOme of these mortgages have features SO OPPRESIVE that the borrower should have never signed the promissory note and the economics of getting OUT of a sub-prime mortgage into a prime mortgage (for those eligible and able to qualify) are usually SO COMPELLING that such borrowers should usually refinance as soon as they are able.  Putting this another way, the breakeven point happens much more quickly.

Third, interest rates are generally MOVING LOWER.  For that matter, the Treasury yield curve is INVERTED, which means that the implicit FORWARD interest rates in near term future periods are LOWER than the current rates.  The MARKET is expecting short term rates to move lower.  If the country sees as large an economic shock as I expect is coming, interest rates may fall back to recent record LOW levels.

Of course, speculating on the future course of interest rates is ALWAYS UNCERTAIN.  There is no real assurance that rates are moving lower.  But if I were in your position I would WAIT.  I think you will be able to refinance at an even LOWER rate a year from now.  But be careful.  Don't be too aggressive about looking for the market bottom.


It is also helpful to distinguish that those in LIBOR indexed mortgages have generally NOT been benefitting from the fall in Treasury interest rates.  THis is because the credit crisis has caused a "flight to quality" driving UP the spread between Treasury and LIBOR rates.  I posted some discussion as to this phenomenon elsewhere on this Message Board.

Those with LIBOR indexed rates and HIGHER MARGINS have a more immediate and compelling need to refinance than those with Treasury Indexed loans.


The negative reaction elicited by your mention of EMC Mortgage should, however, put you on notice as to the importance of being particularly vigilant with EMC as your servicer.  There seem to be MANY horror stories.  Make CERTAIN that you make your payments ON TIME.  Make sure that you regularly obtain an ACCOUNTING as to the application of payments and escrows.  Be PRO-ACTIVE.  Keep a ready liquid reserve.  Get things IN WRITING.  DOCUMENT and MEMORIALIZE all communications.  BE CAREFUL!!    
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The Federal Reserve Board publishes regular reports relating to many market interest rates.  Much of this data is available from this page generally:

I would call your particular attention to the interest rate series shown as H15:

If you check the current release, you will find that the 1-year Treasury Constant Maturity Index for the week ending December 21 was 3.28%.  With a 2.75% margin, this would seem to call for a new interest rate of about 6% (6.03% rounded to the nearest 1/8%), WITHOUT RESPECT TO THE APPLICATION OF RATE CAPS.  You will find that this index has been giving values in this range since late November.  Given the current credit and liquidity crisis I think that you can expect the 1-year Treasury rate to be in this range or slightly LOWER over the next 8 weeks.  The 1-year Treasury rate has FALLEN about 1.75% since July 1, 2007.

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