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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Governor, 4 big lenders agree on plan to stall high mortgage rates

Wednesday, November 21, 2007

Four major subprime lenders promised to give a break to California homeowners who cannot afford escalating mortgage payments, under a plan announced Tuesday by the lenders and Gov. Arnold Schwarzenegger.

Countrywide, GMAC, Litton and HomeEq - which collectively service more than one quarter of subprime loans to people with poor credit - agreed to maintain the initial, lower interest rate for some subprime borrowers whose rates are scheduled to jump significantly higher. To qualify, borrowers must occupy their homes, have made their payments on time and prove they cannot afford payments with the higher interest rate.

The voluntary program is designed to stem a huge wave of foreclosures. Half a million homeowners in the state have subprime mortgages that are scheduled to jump higher within the next two years after their introductory period elapses. Such loan resets, in combination with a slumping real estate market, already have led to a record number of foreclosures across California and the nation.

"With this type of cooperation from loan servicers, we can save tens of thousands of people from being added to the foreclosure lists," the governor said in a statement. "This common-sense approach does not involve a government subsidy or bailout."

It was unclear for how long the loan servicers would freeze the interest rates.

"The word that was chosen is it's for a 'sustainable' period of time," said Mark Leyes, a spokesman for the California Department of Corporations, which oversees nondepository lending institutions. "What does that mean? The answer is, it depends. It could be two years, five years, even seven years. The idea is until the housing market recovers. At that point, housing values would be restored; equity is restored, refinancing becomes an option. But nobody knows how long that's going to be."

Larry Litton Jr., chief executive of Houston's Litton Loan Servicing, said his company plans to expand the initial interest-rate period for up to five years.

"That gives us an ability to go in five years later and if the market has recovered and the consumers can afford an increased payment, the payment can be increased at that time," he said.

Freezing the payment rate makes economic sense for the investors who own the mortgages as well as for the homeowners, Litton said. Studies have shown that each foreclosure costs lenders tens of thousands of dollars.

"Property values are falling dramatically, primarily because there are so many foreclosures already on the market in some areas," he said. "Clearly, it is not good for our investors to have the real estate back. It feels like a no-brainer for a loan servicer to keep the payment where it is, keep another piece of real estate off the market and keep the borrower in the house."

Many subprime loans have initial rates such as 8 percent or 9 percent - already a premium on the going rate for people with good credit. But what about loans with initial rates as low as 2 percent?

"I don't have any in my portfolio," Litton said.

The lenders also said they would streamline the process for determining who gets the loan modifications. Many borrowers have complained that requesting a loan modification required weeks or months of phone calls and ended in a rejection because the criteria for income and credit rating were too high. Others have said they were caught in a catch-22: They could not qualify for a loan modification until they missed some mortgage payments - which hurt their credit ratings. Studies have shown that major lenders have modified only a small percentage of mortgages.

The companies also agreed to provide regular reports to the Department of Corporations on their efforts to reach out to consumers and on how many loan modifications actually occur.

"Overall I am extremely pleased that the issue of foreclosures is squarely on the governor's radar screen and that he seems to have extracted some important commitments from some very significant loan servicers here in California," said Paul Leonard, California director for the Center for Responsible Lending, an advocacy group. "That said, the devil is in the details. The monitoring and reporting on the process is critically important."

-- A federal regulator proposes an incentive plan

for loan servicers who agree to modify lending terms to avoid default. C3

Who qualifies

If you have a mortgage through Countrywide, GMAC, Litton or HomeEq, you might qualify to have your introductory interest rate temporarily frozen. To get help, borrowers must occupy their homes, have made their payments on time and prove they cannot afford the loan's new rate. If this fits your situation, contact your loan servicer to apply.

E-mail Carolyn Said at

This article appeared on page C - 1 of the San Francisco Chronicle

Look at the qualifications borrowers who can prove they cannot afford the payments and are making them on time????????????????

That doesn't compute.
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greg collins wrote:

 To qualify, borrowers must occupy their homes, have made their payments on time and prove they cannot afford payments with the higher interest rate.

Yeah Greg you are spot on! I saw that too, something really isn't right with this article. Really, really fishy.
Alright, there's a problem here.
I said before that I suspect they are causing defaults on the ARMS, in order to raise the interest rates, way ahead of the increase schedule.
so if what i've thought was true, most of the people in these ARMS loans have already been "DISQUALIFIED" even before the qualifications begin.
What a crock, and it oothes such P.R. indecency, it makes me ill.
I wonder how many Cali's heard this P. R. stunt, and were joyous beyond belief, only to find out later that they don't qualify because their payments have been held past their due date.
Now lets talk about the "Proof" that borrowers must supply, of their inability to afford higher payments.
Why would anyone in their right mind want to send copies of all of their other monthly bills to liars, cheaters, and thieves?
Our first Mortg, Servicer before our chpt. 13. Was involved in such illicit practices, that they accidentally canceled the wrong Insurance policy.
They were trying to cancel our privately solicited Home Owners Policy, so they could place their own insurance on the home.
In their process of trying to cancel our Home Owners Policy, they messed up BIG BIG TIME, and Canceled the AUTOMOBILE Policy on the hubby's truck.
Got a letter in the mail telling us that "MORTG. SERV. COMP." had canceled our Automobile policy, and as of such n such date the vehicle would no longer be insured, and that it was illegal for us to have an uninsured vehicle in the state of Ga.~~~ bwahahahha.
The Mortg Servicer, went looking for the wrong policy. AND it was NO MISTAKE of what they were trying to do because, our H. O. INS.  and AUTO policies were with TWO SEPARATE COMPANIES, NON RELATED, AND IN DIFF STATES.
So imagine the damage they could do once they know all of your "other" obligations. Good grief, it's just down right scary for them to know how much a homeowner makes per month, and pays out per month.
They could successfully assert fees, in such an abundantly invasive fashion, as to take the home away almost immediately.
It's too dangerous for them to know what your debt ratio vs income is.
They can and will hold it accountable, when trying to foreclose on the victims, for equity, & other profits.
If these people are in ARMS loans, and their interest rates are set to increase, as the article says, (between now and the next two years) WHY WOULD THESE PEOPLE NOT BE REFINANCING RIGHT NOW?
THEY CANNOT REFI- FOR A FIXED, BECAUSE THEIR CREDIT HAS BEEN RUINED BY THE SERVICERS, (due to holding their payments, & reporting them as late & slow payers to the credit bureaus). THEREFORE THIS ENTIRE PRESS RELEASE WAS PURE UTTER P.R. or B. S. which ever you prefer.
The voluntary program is designed to stem a huge wave of foreclosures.???   WHAT?!!!

Designed to "stem" huge a huge wave of foreclosures means, it is DESIGNED TO MAKE FORECLOSURES.

Did this author mean Designed to "STEM AWAY" from a wave of huge foreclosures?
Wow, and the editor didn't even catch this?

Grrrrrr.............. im disgusted

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