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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Op-Ed Columnist
Enron’s Second Coming?
Published: October 1, 2007

In May 2005 NYSE Magazine featured an article titled “American Dream Builder” — a glowing profile of Angelo Mozilo, the chairman and C.E.O. of Countrywide Financial, the nation’s largest mortgage lender. The article portrayed Mr. Mozilo as a heckuva guy — a man from a humble background determined to help other people, especially members of minority groups, achieve the American dream of homeownership.

The article didn’t mention one of Mr. Mozilo’s other distinguishing characteristics: the extraordinary size of his paychecks. Last year Mr. Mozilo was paid $142 million, making him the seventh-highest-paid chief executive in America.

These days, of course, Mr. Mozilo doesn’t look like such a wonderful guy, after all. Instead, he’s starting to bring back memories of other people who used to be praised not just as great businessmen but as great human beings — people like Enron’s Ken Lay and WorldCom’s Bernie Ebbers.

So far, nobody has accused Mr. Mozilo of breaking the law. Still, what we’re learning from the housing mess is that the crisis of corporate governance, which made headlines in the early years of this decade, never went away.

At this point it appears that Mr. Mozilo achieved the rare feat of victimizing three distinct groups.

First were the borrowers. As The Times’s Gretchen Morgenson reported in August, Countrywide often led customers to “high-cost and sometimes unfavorable loans” that, among other things, generated “outsize fees to company affiliates providing services on the loans.”

Then there are the investors who bought those Countrywide mortgages directly or indirectly, in the form of financial instruments created by slicing and dicing claims on borrowers.

You can’t especially single out Countrywide for the failure of investors to realize how much risk they were taking on — that’s a failure with many fathers, including everyone from Moody’s and Standard & Poor’s, which were far too free with their AAA ratings, to Alan Greenspan, who assured us that while there might be a bit of “froth,” there was no national housing bubble.

But Countrywide made more questionable loans than anyone else — and its postbubble behavior does stand out. As Ms. Morgenson reported in yesterday’s Times, Countrywide seems peculiarly unwilling to work out deals that might let borrowers hold on to their homes — even when such a deal, by avoiding the costs of foreclosure, would actually work to the benefit of both sides.

Why block mutually beneficial deals? As the article points out, Countrywide can make money from the fees it charges on foreclosures, while the losses from mortgages that could have been saved, but weren’t, are borne by others.

Last but not least, since it may be the key to the whole story, is the victimization of Countrywide’s own stockholders.

Last year Mr. Mozilo’s huge compensation drew a protest from a group of shareholders including the American Federation of State, County and Municipal Employees Pension Plan. But the worst was yet to come.

In late 2006, even as Countrywide began using shareholders’ money to buy back its own stock at more than $40 a share — it’s now worth only $19 — Mr. Mozilo was selling. Between November 2006 and August 2007 — that is, during the months before investors fully realized the extent to which his company would be hurt by the subprime mortgage crisis — he unloaded $138 million worth of Countrywide’s stock.

Again, unless the stock sales lead to insider-trading charges, there’s nothing in this story that involves illegality. Still, how can it be that so soon after Enron, WorldCom and other scandals rocked the business world, we’re once again hearing about executives cashing in just before their companies are revealed as less successful than advertised? The answer, of course, is that we never dealt properly with those scandals.

Here’s what I wrote back in May 2003:

“Last summer it seemed, briefly, as if the torrent of scandals — and the revelations about how closely some of our politicians were tied to scandal-ridden companies — would bring about a public backlash against corporate malfeasance. But then the topic largely vanished from the news, driven out by reports about Iraq’s nuclear weapons program and all that. And after the midterm elections, which put apologists for corporate insiders back in control of all the relevant Congressional committees, we might as well have had the sirens sound the all-clear.”

Sure enough, C.E.O. paychecks, which came partway back to earth in 2002, more than doubled between 2003 and 2006. And with those huge paychecks came renewed incentives for malfeasance. Once again, executives could become richer than Croesus by creating the illusion of success, even for a little while.

There is one big difference this time: the number of victims — misled borrowers, homeowners whose neighborhoods are being destroyed by foreclosures, investors who thought they were buying safe assets — is even larger.

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I am beginning to believe the press constantly missing the mortgage
servicers fraud upon the borrowers is deliberate.

If it is not deliberate; we seem to have reporters needing to go back to kindergarten.

Oh, what is a little fraud against the borrower?

Even Mozilla said that mortgage servicing business contained within his
company pays all the bills for all overhead experience for the year.

Doesn't that speak to anyone but borrowers that have been ground to glass by a mortgage servcer?

The servicers have gotten away from being accountable for the way they have programmed their computers to spit out "late payment" notices
eventhough the borrower has paid on time and in full.

Mozila seems to like being interviewed and bragging about servicing arm.

Can it possibly be true there are no investigative reporters that don't see
this fraud?

Oh, that's right, Mozila probably buys advertising space for your local news?

I think a Countrywide person should lead the group looking for lawsuits,
Generally Accepted Accounting Principals (I just typed in GAAP into my
web browser and came up with over 20 articles.

Countrywide supplies us with the information that they are indeed the big
dog in the hunt for bringing mortgage servicing business back into its
umbrella of companies. Or it may be renamed as an arm of Countrywide.

There are excellent researchers here.

Try to do it now before the class action attorneys get you blocked into
their suit.  Then maybe put the FTC on notice that might want to
investigate and force a "best Practices" agenda with $$$$$ payable to
borrowers if and when they violate their own "Best Practices".

Their Countrywide Building in Calabasas is set in the Hills and is worth
Gicunda bucks.  His personal wealth after selling his stock at a conviently
priced stock and sold, I think the article said $148,million.  I can tell you truthfully that Fairbanks put a target on my back.

Every month, month after month they triied every trick in the mortgage servicing fraud book.  I forget the exact number now 14 to 16 mortgage
payments MISAPPLIED to seem as though they were entitled to collect it,

They weren't.  All mistakes on my loan were made by the servicer.

No late pays, no short pays, no bounced checks, thankfully I knew
somehow that I should pay the taxes and insurance myself.  They tried to get me to open an account.  I said no.  They wrote again to try to get it.
I said No.  and added this time that my contract does NOT allow you to
add taxes and insurance to tag onto my mortgage.  I had to show proof
I paid it.  No problemo.  Did they stop it? 

I'm just guessing they were after that $1,000.00 extra principal.
Trying to pyramid their asessments none of which was caused by my failure
to perform as the contract is written.

From what I read here and on rip off reports, they seem to be running the same scam as the others like Fairbanks and the others.


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