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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Sandy
According to this report, foreclosure decreases high scores almost twice as much as mid scores. And those with high scores don't fully recover simply by building back to the prime-level score range (above 660), rather their full recovery is reaching the pre-delinquency high score.

From the report:

"The limited information made available by Fair Isaac suggests that FICO scores fall by about 85 points for a hypothetical borrower with a pre-delinquency score of 680 or 160 points for a borrower with an initial score of 780 (Christie, 2010). These declines are calculated based on simulated events in which a foreclosure occurs in isolation with no other accounts becoming delinquent..."

...10. An alternative definition of "recovery" (at least for prime borrowers) might be when a person's credit score returns to prime levels (i.e., above 660). This definition, however, ignores that expected delinquency rates decline as scores increase, even through the prime ranges (Board of Governors, 2007), and as a result, with risk-based pricing, borrowers can expect to pay higher costs for credit than they would have had they maintained their pre-delinquency scores. Additionally, credit scores may be noisy measures of borrower creditworthiness (both across time and across scores calculated from the three national credit bureaus) such that borrowers with lower prime scores will be more likely to find themselves below the prime-score cutoff on any given day than they would have had they had the (higher) prime credit scores prior to their mortgage delinquency. For these reasons, we believe that borrowers whose scores return to prime levels, but remain below their pre-delinquency levels, have not completely recovered."

http://www.federalreserve.gov/pubs/feds/2010/201059/index.html

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William A. Roper, Jr.
Sandy:

In my view, there are far too many dynamics unique to individual borrower circumstances to readily generalize about how far a credit score will fall and how long it will take to recover.  These dynamics include peculiarities of local laws.

At one extreme, suppose that a borrower has no actual credit or cash flow problems and simply CHOOSES to strategically default.  ALL of the borrower's other accounts may remain current.  In a few states, the Lender has recourse ONLY to either the property or a suit on the note and in these states no deficiency judgment is  possible.

In other states, a foreclosing lender may obtain a deficiency judgment which may remain as a liability of the borrower for years unless paid or discharged by bankruptcy.

Some borrowers will seek bankruptcy protection.

Some borrowers put up a protracted fight to retain their home.  Others give up quickly and easily.

Those whose foreclosure is compounded by a bankruptcy filing (or multiple filings) will inherently suffer greater credit impairment than those who are only weighted down by the foreclosure.

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At another extreme are those few property owners who are defending against a foreclosure related to a property where the owner has NO OBLIGATION on the underlying alleged promissory note.  This situation can arise where an owner agrees to sign the alleged mortgage or deed of trust, but NOT the note, OR in a probate setting where heirs come to own the subject property possibly subject to a mortgage or deed of trust purported to have been executed by the decedent.

In this situation, the owner suffers NO CREDIT IMPAIRMENT AT ALL, since the owner has NO OBLIGATION to repay the loan.  The loan simply cannot and does not appear on the owner's credit report.

*

While it is useful to study and understand the aggregate effects of foreclosure on credit, it is also helpful to appreciate the circumstances contributing to variability in outcomes!  
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Sandy
Mr. Roper, did you read the report? It covered a lot of the dynamics that would differ. My excerpt was not intended to cover all cases--or all the report, for that matter--but was general, such as the reported effects on high- vs. mid-range scores. I included a link to the entire report for more of the charts and graphs and comments about some of the differing dynamics, and the fact that there certainly would be some. That is a given, and likely understood by the average reader of my post.


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Before all of this foreclosure mess happened, I had a credit score of 750.  Had our own business and did very well.  We met our financial obligations with no problems.  Then the fall of 2008 came and we lost big time.  When I filed BK and did the credit counseling, my score was down to 530.  I am sure after the BK went through and my house illegally foreclosed on, my score is further in the toilet.  I have not checked my credit score and quite frankly I don't care.  I will be 58 on Mothers Day and I know that I will never be able to own a home again, I will never get another credit card, and a car loan is out of the question.  I refuse to live up to some standard that puts me in a hostage situation.  Sure I know there are downfalls to a low score, believe me I know.  I realized that when I was receiving collection calls, they all said, "We will report you to the credit bureaus."  It was like they enjoyed it, oh the power they had.  They have no more power over me, that burden had been lifted.  Although many may not agree with my attitude about my credit score, I know where I stand and I can live with that.     

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William A. Roper, Jr.
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Sandy said:
Mr. Roper, did you read the report?  It covered a lot of the dynamics that would differ. My excerpt was not intended to cover all cases--or all the report, for that matter--but was general, such as the reported effects on high- vs. mid-range scores.  I included a link to the entire report for more of the charts and graphs and comments about some of the differing dynamics, and the fact that there certainly would be some.  That is a given, and likely understood by the average reader of my post.

 
No, Sandy.  I did not read the full report and apologies are probably in order.  I was looking at the MS Fraud Forum today as I was having breakfast at a Diner (WIFI) and was distracted as my food arrived.
 
In retrospect, I was reacting to the text you posted rather than a more complete reading of the refernce material linked.
 
I apologize!  I will go back and take a look at the report soon.
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