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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My husband and I are going through smoething I am sure we will start to hear a lot about.  WE have a loan with Countrywide and we had water damages to our home.  WE got be hind on our payments but we stayed in contact with Countrywide about what was going on.  3 weeks ago we sent an Insurance check for $26,317.78, the ajusters report that had total damages at       $18,818.00.  We requested at the time that Countrywide take enough money from that check to cover our morgae and bring it current.  A week later I am told they never recieved the request letter (bull it was in the same FedEx package I sent the check with).  So I faxed them another request letter.  In the mean time My husband and I have been working on the home so we can get moved back in.  I was told at first Countrywide would divided the payments to me in 3rds.  Then I was told since my loan was behind I had to have a contractor, then I was told they would send some one out to inspect the property and see how much work I had done the release the founds.  The whole time I was telling move money over first to get my loan current.  Just yeasterday they tell me they can not move the money over because I am in forclouser.  I was like what are you talking about?  I just talked to the customer Service people in Wednesday and they did not say anything to me about that.  So I called another number they gave me and yes they had put my home in forclouser while there Claims department was holding a $26,000.00 check and $13,000.00 in repairs was already comleted on the home.  Now if this is not the stupidest thing in the world then I do not know what is.  I have been stressed out by this entire thing and would like to do if I have any legal rights as to getting the money for the work done and back charging Countrywide for any additional fees they are now going to tack onto my loan just to get it out of forclouser?  Does anyone know or can anyone point me in the direction to find a lawyer that would know?  I am lost and I am tired of dealing with Countrywide.  Everytime I call it is something different and it never makes since. 
I am in Oklahoma so if you know what I can do to stop this mess, get my money from those creeps and file against them to recoop some of the lost money and time I would really like to hear form you.


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hi  just find a contractor that  you trust  and have him submit  a bill  with you and him as  payee they will come out and see the work was done and send you a check it takes 3 weeks  or send them a pre paid over night   package 

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We have tried to find a contractor we trust.  Those seem to be hard to come by these days.  That is why we are doing the work ourselves.

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Start by contacting the Oklahoma Insurance Department. Explain your situation. If they say this falls outside their domain, they can point you to another person/agency that can help.

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The reality is that a lender/servicer is in the driver’s seat when it comes to divvying up insurance proceeds.  It comes with the power instilled by being a “loss payee” on the homeowner’s policy.  Servicers are bound by the terms of the Pooling and Servicing Agreement (PSA).  The PSA says the servicers must be sure that the mortgaged property is maintained.  This is especially true when a loan is in default.


They know that a lot of people who have little or no equity, and are in default, might just try to find a way to take off with as much of the insurance proceeds as they can and leave behind a house with the mold infested sheet rock, floors and carpets.  This is why they (a) want to see a contractor involved with the repairs and (b) dole out the money in dribbles and drabs to be sure all of it is going towards the repairs and not into the pocket of the borrowers.


In this case, Karry and her husband are doing the work themselves and using would have been a contractor’s profit as a contribution to the family budget.  There is nothing wrong with the process except lenders and servicers hate it.  And in some cases their dislikes are well founded.  There has been more then one homeowner who has just painted over the mold leaving the other side of the sheet rock and the fiberglass a serious health risk and devaluation of the property value.


I would certainly consult with the Oklahoma insurance people for guidance.  At the same time you are going to need to prove to Countrywide that you are qualified to do the work and that you are indeed doing the work properly.  You will also need to allow them to inspect the progress of the work.   I would also fully document the progress of the work with close up still photos.  There can never be enough pictures.  Hopefully you have before pictures.  Put the pictures in chronological order with captions of exactly what is going on in each photo with the date and time. A camera generated date/time stamp is best.  Send this to Countrywide along with your request(s) for a draw payment.  Do a timeline beginning when the damage occurred and give intermediary dates of when each phase of the restoration will be completed.  Base you draw payments on the timeline.


Start sending "Qualified Written Requests" to Countrywide explaining exactly what you expect them to do with the proceeds.


Hope this helps      


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First of all do not confuse their actions as being "stupid". Intentional is a better word.

2nd, get an attorney.

They are not idiots they will find a way to keep the insurance and they will take your house away from you to keep from having to apply a dime to your loan.

You need to act quickly and forcefully
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4 justice now

Ohio is absolutely right!

No matter if it has been noted as individuals or a group, we have all simply experienced far too many instances of this type of behavior to ever again attribute it to incompetence or stupidity alone.

Even worst yet is the fact that the vast majority of these so-called lending/servicing companies have proved beyond any doubt, especially in the last six or more years, that they cannot be trusted to act in a lawful manner, much less in a way that would even be construed as ethical and/or moral.

As noted in many previous posts by others you should document everything from here on and avoid using the phone, as it's far more important that you possess a paper trail which can be presented as evidence in the future if/when needed.

My opinion only.

I wish you the best of luck!



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