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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Interesting that this is brought in Bankruptcy Court:

Courtesy of the Home Equity Theft Reporter:

Class Action Suit Alleges Conspiracy To Squeeze Bankrupt Homeowners In Foreclosure; Fidelity An Alleged "Secret Puppetmaster" Of Creditors' Lawyers

In Houston, Texas, The Associated Press reports:
  • Homeowners have sued Fidelity National Information Services Inc., a giant financial data-processing company, accusing it of raising the price that cash-strapped consumers must pay to avoid foreclosure of their homes. The lawsuit, filed Jan. 16 in the U.S. Bankruptcy Court in Houston, contends that Fidelity has conspired with mortgage-servicing companies and law firms to "add to the indebtedness" of homeowners by tacking on secret fees that remain undisclosed for years.

  • "The fees the Fidelity-controlled law firms charge in Chapter 13 bankruptcies are inflated by 25 percent to 50 percent," the lawsuit asserts. The law firms, it says, then "kick back" the extra amount to Fidelity under a formal agreement under which the law firms' fees are set. "Fidelity keeps its role, as well as the kickback, hidden from the courts as a matter of systematic policy."

***

  • Fidelity counts Washington Mutual and Bank of America among the biggest clients of its default-management services. The company says it handles default mortgage servicing for 22 of the top 25 residential mortgage servicers, and 13 of the top 25 subprime servicers.

For more, see Suit claims Fidelity abuses homeowners.

Editor's Note:

The lawsuit also describes Fidelity's alleged role as follows (page 5, paragraph 21 of lawsuit):

  • [F]idelity’s “comprehensive” role is really that of secret puppetmaster of the law firms that appear in [the Houston Bankruptcy] Court on behalf of mortgage servicing lenders. These law firms (in the Harrises’ case, Mann & Stevens, P.C.) collect their fees by tendering their bills through Fidelity and then on to the mortgage servicer – in this case Saxon, which then charge debtors, like the Harrises, without ever obtaining this Court’s
    approval.

To view the entire lawsuit, see Harris vs. Fidelity National Information Services Inc.

Go here to download Misbehavior and Mistake in Bankruptcy Mortgage Claims, a recent report on the conduct of some lenders in court proceedings when homeowners file for bankruptcy protection (by Katherine M. Porter University of Iowa - College of Law).

Go here and go here for posts on questionable mortgage servicing practices.

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Blossom

......and would you look at THIS, just out today from Fidelity.  Note FIS says they will use this Web-based Electronic-Signature Solution for mods and "other applications" but they don't say what the "other applications" are.   Sure looks like another way to tool homeowners to me.

Fidelity National Information Services

Fidelity National Information Services, Inc. (FIS) is a leading provider of core financial institution processing, card issuer and transaction processing services, mortgage loan processing and related information products and outsourcing services to financial institutions, retailers and real estate professionals.
News

FIS ClosingStreamSM Offers Self-Service, Web-based Electronic-Signature Solution for Loan Modifications and Other Applications

Jacksonville, FL - 5 February 2008
Fidelity National Information Services, Inc. (FIS) today announced a new Web-based loan-modification and electronic-signature solution that is built into its ClosingStream e-mortgage-technology platform. The solution primarily is designed to help lenders save money by limiting adjustable rate mortgage (ARM) re-set servicing costs, while reducing the loan-modification and electronic-signature time frame from the typical eight to 10 days down to as little as a matter of minutes.

Industry demand for automated process enhancements, such as loan-modification and electronic-signature technology, is growing quickly as ARMs continue to re-set. As a result, investors and financial institutions are trying diligently to prevent portfolio runoff, as well as costly defaults and foreclosures. Top lenders estimate that the number of loan-modification requests in 2008 will increase by tens of thousands. ClosingStream's new solution provides the most effective and secure method for executing multiple types of documents, applications and contracts.

ClosingStream's loan-modification and electronic-signature solution is available in a service model or, in conjunction with a company's own software and branding parameters, as a private-label application, making it the optimal solution for virtually any modification scenario.

"Customers are able to conveniently e-sign documents virtually anywhere, anytime - at home, at the office or on vacation," said Ron Frazier, president of the LSI division of FIS. "The e-sign feature provides benefits to both the customer and lender by providing an effective and efficient method to present, review and sign most document types. By using our technology, most documents are signed within hours, sometimes minutes, versus the days that it traditionally takes." "ClosingStream's loan-modification and e-sign solution is applicable to most types of document presentation and signing events, including the delivery of disclosure documents," said Al Verkuylen, chief strategy officer for FIS' LSI division. "Existing e-sign compliance requirements are met with simplified presentment and a recorded audit trail that contains the customer's acceptance and time/date stamps. Equally important is that lenders can make timely account changes, thereby increasing company revenues while decreasing delinquency and losses."

http://www.bobsguide.com/guide/news/2008/Feb/5/FIS_ClosingStreamSM_Offers_Self-Service,_Web-based_Electronic-Signature_Solution_for_Loan_Modifications_and_Other_Applications.html

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