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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OriginalFedUP
Let me re-introduce myself.  I am FedUP from the year 2000.  Yep folks it's being going on that long.  I was one of the frontrunners who helped take down the almighty Fairbanks and refused to listen to attorneys (that I worked for as a paralegal for 20 years) that I was wrong and they were right. 

That being said, I'm rusty to say the least having not been active in MS Fraud for about 5 years.  Oh I've popped in here and there and did keep in contact with some of the other originals over time. 

A good friend of mine, whose father in law (Pops) owns/owned their home, lost their home to foreclosure for (as far as I know) just plain not paying their mortgage.  Their six months -- Michigan non-judicial state - to be out expires on Feb 2, just less than a week away. 

When it originally happened, she told me Pops told them not to worry as he had hired an attorney who guaranteed they would keep the home, even tho it was sold at auction already.  *something fishy to me here*.  Pops paid this attorney more than $2,000 to save the house. 

She told me about 3 days ago "we saved the house!  Pops only has to make 3 payments on time and everything is fine."  *more fish* 

She tells me today:  I just talked to Pops this morning, and he was telling me about the house.... I guess nothing is written in stone yet. He has to make 3 payments on time, and get a packet of paperwork to fill out, and THEN we will see if the new mortgage co. will accept it. Pops told me just in case, I should be looking...... oh what to think!!! 

Then she says: 
but come feb 1st. I am told officers will serve us papers to move, in a certain amount of time. I am told to ignore it. 

Having been involved in this for so long, I really don't think this is the way it works in a non-judicial state.  Six months is 6 months.  So come Feb 1 will she: 
1.  Really be given a certain amount of time or put to the street? 

2.  Are the 3 months payment legit or a scam to one of these "we can save your home!" places. 

Something is wrong, wrong, wrong with this whole scenarios.  Any info and help to this rusty, but still active MSFraud advocate is much appreciated. 


Karen R. Flansburg
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iknow
OriginalFedUP wrote:
Their six months -- Michigan non-judicial state - to be out expires on Feb 2, just less than a week away. 

Pops only has to make 3 payments on time and everything is fine."


Their "six months" is a redemption period. During this "six months" as you put it, they need to pay THE FULL AMOUNT of the sale as well as any fees owed. Pretty much, they have 6 months to buy or sell the home. 600.3240

So it very well could be correct that they only have 3 payments left. They most likely would be LARGE payments, but it certainly is within the realm of possibilities. It is also possible that they have an attorney that is going to file bankruptcy for them prior to the deadline. I'm less certain of what effect this would have but it of course could impose a stay, which would allow them to keep their home until the say is lifted.

The reality is that unless they have large cash resources, the attorney is working something through bankruptcy, it appears that they will get an eviction notice on the 2nd. The only people that know what is going on will be the homeowner.
"Between two evils, I always pick the one I never tried before."

-Mae West
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arkygirl

Hey, FedUp, long time no hear. Hope you are well.

iknow has hit the nail on the head. Nothing has been done to help Pops except lightening his load by a couple thousand bucks. Has Pops ever seen one document from this "lawyer"? What is being described with making "3 payments on time" and filling out a "paperwork packet"...well, I would bet a catfish that Pops and this "lawyer" are filling out a loan mod packet (and those work out sooo well!)

Report this bottom feeding lawyer ASAP. Is it a real lawyer or someone claiming to be a "specialist"? Oh, and show this to Pops so he can call the MI AG. Heaven only knows what this conman "lawyer" got Pops to do. For one thing, ONLY $2000.00 to fight foreclosure and save a home? That would be a bargain basement deal even down here in the deep South...$2000.00 to help someone fill out a useless loan mod packet is a gross overcharge! And I seriously doubt this amount would cover BK filings, but maybe it would.

I hate to sound like an evil "B", but if Pops just quit paying the mortgage he really cannot seriously think he can keep the home through "Paperwork Magic and Sleight of Hand". You might want to be a sport and help this family find some large boxes for their upcoming move...

CONSUMER ALERT 

 

 ILL SCHUETTE

 

ATTORNEY GENERAL

 

 

The Attorney General provides Consumer Alerts to inform the public of unfair, misleading, or deceptive business practices, and to provide information and guidance on other issues of concern.  Consumer alerts are not legal advice, legal authority, or a binding legal opinion from the Department of Attorney General.

 

FORECLOSURE AND CREDIT ASSISTANCE

 

As a result of the recent home mortgage foreclosure crisis, there has been a dramatic rise in the number of unscrupulous businesses that promise to help consumers keep their homes.  The Federal Trade Commission has warned of scam artists who prey on the vulnerability of desperate homeowners in order to collect handsome fees -- but don't deliver any of the promised services.  Many of these shady operations engage in high-pressure sales tactics and demand substantial fees in advance. (Links to consumer alerts and advisories are set forth below.)

  

If you are behind on your mortgage payments and facing foreclosure, WATCH OUT for fraudulent foreclosure consultants who target distressed homeowners.  The following tips can help you avoid being scammed.

 

RED FLAGS -- Avoid Working with any person or company that:

 

  • Guarantees to stop the foreclosure process - no matter what the circumstances. Instructs you not to contact your lender, lawyer, or credit or housing counselor.

  • Collects a fee before completing all services.  This practice may be illegal in many circumstances in Michigan under the Credit Services Protection Act.  (See Below for an explanation of that Act)

  • Encourages you to lease or rent your home so you can buy it back over time.

  • Tells you to make your mortgage payments directly to it, rather than to your lender.

  • Tells you to transfer your property deed or title to it.

  • Offers to fill out paperwork for you.

  • Pressures you to sign paperwork that you haven't had a chance to read thoroughly or that you don't understand.

Mortgage Fraud and Foreclosure Rescue Scams

Michigan ranks in the top 5 states in the country for mortgage fraud and foreclosure rescue scams. To combat these crimes, the Michigan Foreclosure Task Force secured funding to launch Scam Alert awareness campaigns.

Basic Scams

  • A “Foreclosure Prevention Specialist” Scam: Involves someone taking the homeowners money up front to work with the lender and “save” their home. They will look professional but take the homeowners money and do nothing to save the home.
  • The Lease/Buy Back Scam: In this scam, homeowners are tricked into signing over the deed to their home based on promises that they can stay in the home as a renter and buy it back later. Generally, the terms of the lease are so difficult that homeowners are rarely, if ever, able to repurchase their homes.
  • Bait-and-Switch Scam: In this scam, a homeowner unwittingly signs over the deed to the home thinking s/he is merely refinancing it to provide income. A typical target for this scam is elderly widowed women many of whom end up being evicted from a home they have owned outright and lived in for years.

Scam Prevention

In order to prevent being victimized by a foreclosure or mortgage scam:

  • Never pay anyone up front to help you work with your lender;
  • Never trust anyone who guarantees they can save your home;
  • Never sign anything you haven’t read or don’t fully understand;
  • Always seek the help of a FREE HUD or MSHDA-certified foreclosure counselor.

 Scam Reporting

If you think you’ve been the victim of a foreclosure scam, report it by contacting the Michigan State Attorney General’s Office or calling 877.765.8388. If you would like to register a complaint about a licensed mortgage broker or lender contact the Office of Financial and Insurance Services or call 877.999.6442

Scam Prosecution

Michigan State’s Attorney General’s office has made the prosecution of mortgage fraud and foreclosure rescue scams a high priority. However, in order to prosecute scam artists, it is important to know the law.

In the state of Michigan, laws are in place that make it illegal to require payment for a service before the service is rendered. As almost all scams will ask for money up front, they are able to be prosecuted.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

So, just for fun, let's see how far we have come over the past twelve-thirteen years. Just found this this morning and the song and the tune are familiar as the long running hits always are. Feel free to hum along. It is the same consarned things that Fairbanks was doing all those years ago! [crazy] Boggles the mind, doesn't it?[crazy] The servicers have used the law to tweak their frauds and so it goes, world without end...

Think The Mortgage Industry Has Cleaned Up Its Act? Think Again.


Last week, the Consumer Financial Protection Bureau (CFPB) released a report detailing abuses by mortgage servicers. Despite numerous legal settlements and pledge after pledge by servicers that they follow the law, the report exposes the many ways these companies have continued to do wrong by consumers, making the case for a strong financial regulator to protect consumers from unscrupulous or incompetent financial services firms.

Mortgage servicers are the companies primarily responsible for collecting mortgage payments from borrowers and forwarding them on to the lender or, if the loan is securitized, the investors. They are also the companies in charge of foreclosing on homes or helping troubled borrowers modify their loans to avoid foreclosure. Since the start of our housing crisis, servicers have become notorious for their failure to perform even routine administrative tasks competently as well as for forging paperwork and foreclosing on borrowers even when modifying their loan would have returned more value to the loan’s owner.

Consider one example of the enforcement actions detailed in the CFPB report: The agency had to force two unnamed servicers to stop requiring borrowers to waive their legal rights in order to obtain a loan modification. These waivers typically require the borrower to waive not only their legal rights related to the modification, but also those related to actions that have nothing to do with it and for illegal actions that have yet to occur. For example, a borrower could end up waiving her right to hold her lender accountable for lying about the terms of her mortgage, and as a result, the borrower would lose an important defense against foreclosure and could end up losing her home.

Because of their pernicious effects, the government has taken firm steps to combat these waivers. The government banned them for modifications supported by its Home Affordable Modification, or HAMP, program, and Fannie and Freddie also told their servicers not to use them. Even more broadly, the National Mortgage Settlement essentially prohibited them for the servicers involved in that agreement. In fact, in a public hearing on servicing practices where the topic of waivers came up, former chairman of the House Financial Services Committee Barney Frank told servicers in the strongest terms possible he never again wanted to hear about such a waiver being used.

Despite all of this, the CFPB found that two servicing firms were still asking all borrowers, regardless of their individual circumstances, to sign such waivers. Fortunately, the CFPB has the authority to regulate this practice, and did—ordering the servicers to stop this practice and to cease enforcing the waivers that borrowers had already signed.

The CFPB’s report also detailed other abuses, such as failing to honor loan modifications after a borrower’s loan was transferred from one servicer to another, flubbing the handling of tax and insurance payments from escrow accounts, and reporting incorrect, damaging information to credit agencies. As a result of CFPB’s enforcement actions, wronged consumers have received $2.6 million between July and October 2013.

The CFPB’s report makes clear that without a regulatory cop on the beat, our nation’s financial firms will continue to abuse consumers. It’s something we can’t forget as we get further and further away from the worst of the financial crisis.

David Sanchez is a Research Assistant for Housing Finance and Policy at the Center for American Progress Action Fund.

http://thinkprogress.org/economy/2014/02/04/3244811/mortgage-servicers-cfpb-report/

 

 

 

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OriginalFedUP
Arkygirl!  You're still here after all this time?  KUDOS to you!  I kept in touch with Dee for quite a while, haven't heard from her in some time.  Same with Steph, but it's been longer that I've not spoke with her.  Also talk to Kinney every now and again.  Thanks for all the great advice.  I sent it on to my friend.  Luckily for her I did find the "Protecting Tenants on Foreclosure Act"  for her as they are technically renting from "Pops"  and the Act has been extended thru Dec 31, 2014.   So that helped calm down some stress some. 
Karen R. Flansburg
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arkygirl
Yep, still here, but not very often anymore.

Until the government figures out what mortgage servicers are and the PSAs that bind them, what investors/real owners are, what Trusts/REMICs are, we will never progress. The government just demands that servicers give loan mods like they are an original contracting party in the mortgage. I am fairly sure that servicers are still constrained from modifying contracts (UNLESS there have been huge changes in the PSAs while I wasn't looking).

So, it is better for a servicer to PRETEND to give a loan mod (I think they get a bonus for that under one or another of these goofy laws- HAMP, HARP, whatever), suck up the trial payments and whatever extraneous fees possible and then toss that hot potato to the next servicer before the burning starts. And then the next servicer rinses and repeats. All the while payments and paperwork are "lost"...well, you know.

It is the same broken merry-go-round from over a decade ago except we didn't have the "loan mod" scam back then; they just lied and stole pretty much out in the open. AND all these "foreclosure/home rescue" scams didn't exist , either). Amazing that more laws just gave rise to whole new fraudulent industries. The irony just kills me. It was almost simpler then...[rolleyes]

It stumps me as to why the highest legislative body of this land after all these years cannot seem to figure out how this mortgage scheme works and pass laws that will really help. Lawmakers seem to vaguely know that Wall Street had something to do with it, but cannot seem to get beyond that. They don't even seem to know what exactly Wall Street was doing with MBS. Fining servicers will never help; they are middle men and have very little power, but they are the most visible targets since they collect the money. Whoopee! The government will just collect money for itself from the servicers...homeowners unjustly robbed are SOL.

[mad]There seems to be no appetite for prosecuting anyone on Wall Street or TBTF banks at all; you and I know that THERE is where they will find the real nefarious masterminds of all this fraud. Wrist slap, pay a pittance fine and it's right back to business. (Oh, and be sure to give your CEOs a huge raise because they are so tired and overworked looking for new fraud loopholes in every new law passed by clueless I-dots.) Didn't we used to have a banging your head against a wall emoticon here? Well, I'll just use another of these then..[mad]

YOU could write better laws than this helpless hapless bunch of so-called legislators and regulators simply because you understand how it works and they don't (or they are just pretty good at playing like the biggest dummies on planet earth!) Maybe they are just too busy trying to figure out how to buy health insurance these days...oh, never mind. They exempted themselves from ACA, didn't they?

We need butts in houses in America, but we need financial system butts in prisons much more. Until that happens the endless scam will continue. The entire mortgage system needs to be revamped, not just little servicer fines collected.

I still miss the "old group", though. I wonder if they came through everything OK or not. I know some did not, but I hope some emerged victorious. Most of them would be prohibited from telling anyone because of the secrecy clauses in all these settlements. I still root for them and hope that somewhere, sometime in America justice was done.

Good luck with trying to help your friends and their Pops. I think they will need luck and possibly an Act of God. An Act of Congress is never any help....
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Kohler
Good advise Arky!  I know someone who fell for that scam!!  Paid attorney $5,000 to stop foreclosure.  Got the boot.  The attorney who had orally told the borrower it was sure thing after said he did his best.  Tough luck!
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