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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Maybe all the LENDERS should FIRE the SERVICERS.
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arkygirl
Aw, Gene, have a little faith here. It could (and probably will) happen that one or more servicers will go bankrupt. It will take a little time, though.

The system is set up that servicers are paid "by the piece", so much per loan serviced. Servicers were getting thousands of new loans to "service" every month, poor overworked incompetent fools. Now the credit markets are drying up and many fewer people are able to get loans. Nonprime is pretty much dead, along with no doc, interest only and 100% loans. Many of their source companies are out of business or will be soon. Banks may begin to consider keeping their loans in house so that they can maintain some control, lessening the need for servicers even more.

There goes a lot of future business for the servicers overnight. That business is GONE! Also gone are all the people that were railroaded into foreclosures so that servicers could get their appreciating properties for a song. With ruined credit, these folks will be homeless and credit-cardless for a long time.

OK, servicers have been foreclosing like crazy and buying these houses for themselves because they were also acting as RE speculators/flippers. They figured they could increase net profit with way. But there are not many takers for all those REOs these days. It has become a lot more difficult to obtain a loan now and property values have dropped dramatically in many areas. Taxes have to be paid (at the overappraised rates) and maintenance done on these properties. These former REO assets are now quickly becoming liabilities and a big drain on capital.

Soon, servicers will have many fewer notes coming to them for servicing. They have large inventories of unsellable homes on the books.

It will work its way down the chain in due time. Just hang on and watch. Servicers may own entire blocks in some large cities but without any buyers who can get financing they will be the kings of nothing. The servicers have shot themselves in their collective feet and I will cheer on the fall of the servicing empire as it happens. Couldn't happen to a better group than servicers, IMHO. Stupid a$$es thought the band would play forever and so they paid no heed to those they trampled as they danced. Now that the band is packing up to go leave, the servicers don't know what to do. (I have predicted that they will all morph into skanky debt collectors, but who knows? Debt collectors have pretty stringent rules, something servicers are not used to.)

Here is the equation: Much less new business +  income drain from REO maintenance/taxes = insolvency > bankruptcy.


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4 justice now

The problem with that scenario is that the CEOs, upper management, etc have already sold all their company stock, and will most likely will be able to keep all their ill gotten gains. No disgorging for them or their families.

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cfc services mortgages

Countrywide services their own mortgages

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