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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Lucrative Fees May Deter Efforts to Alter Troubled Loans

Many mortgage companies are reluctant to give strapped homeowners a break because the companies collect lucrative fees on delinquent loans.

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h gosh
Want to get to the bottom line - of the servicers, that is?  Let Congress DEMAND that the servicers' financial statements be opened up for public scrutiny.  Let the people see how many loans were charged BPO fees,;how many were charged Forced Place Insurance; how many payments were put into "suspense" so that late fees can be collected; what percentage of the "recaptured" advances the servicer gets to keep for "administrative" fees; what insurance was applied for and payment made.  Then, and only then, will the truth be known.
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JohnH
h gosh, it has to be in the billions!
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The Equitable One
It saddens and frustrates me that I (and many here) was aware of this dynamic and unethical behavior quite some time ago, and further that the vast majority of the US population looked at me as if I had drool coming out of both sides of my mouth when I spoke the truth about it (and still do for the most part).

They (uninformed population) still believe the utterly false lines of spin that essentially state "The bank doesn't want your house," and disregard the reality of foreclosures continuing to rise because they are very lucrative for the many parties involved in the process. Many parties.

Anyway, thanks for posting the link and article.

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A Comment
Services M-O-N-O-P-O-L-Y + hostage borrowers = HUGE Profits for Scammers

No one can win against this system. The servicers are into every aspect of a foreclosure.

WHY would servicers build such huge expensive foreclosure-oriented networks unless they planned ahead of time to have a LOT of foreclosures? They would only invest money in things they saw as profit generators and they have the complete ability to ensure that these foreclosures are profitable for them.

It is self-fulfilling. Servicers win either way they go and borrowers lose either way. It is ALL "easy money" in Servicerland and almost everything else is more lucrative than simply servicing a mortgage honestly. As long as this system is set up this way people will continue to have their homes stolen. That's the bottom line.

"As a home slides toward foreclosure, mortgage companies pay for many services required to take control of the property and resell it. They typically funnel orders for title searches, insurance policies, appraisals and legal filings to companies they own or share revenue with.

Ocwen established its own title company, Premium Title Services, in part to keep more of the revenue from foreclosures, said Ms. Golant, who helped start it.

“It was hugely profitable,” she said. “Premium Title would charge for the title when it got transferred to Ocwen, then charge again when it got transferred to the new buyer, and then sell title insurance. It was easy money.

Mortgage companies not only gain this extra business through their subsidiaries, but also collect reimbursement for the payments when the houses are sold."

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A Comment
"Twice this year, Bank of America has ordered appraisals of the property as part of Mr. Crawford’s request for a short sale. Both times, the bank gave the order for the appraisal to its wholly owned subsidiary, LandSafe, paying the company a total of $900.

When Mr. Crawford stopped paying the insurance policy on his home, Bank of America took out its own policy, securing it from another subsidiary, Balboa.

Bank of America stands to collect reimbursement for these fees whenever the property sells.

“Bank of America is making out like a bandit,” said Mr. Crawford’s real estate agent, Brian Moore of Prudential California Realty. “They are doing everything in their power to push this down the road so they make more fees.”

http://www.nytimes.com/2009/07/30/business/30serviceside.html?_r=2
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See New York Times, you were all wrong.  At least the friendly folks at the MBA say you were.  Look here, damn-it, there is NO profit in foreclosures.  Humm, the article seems to have struck a nerve.

http://www.cnbc.com/id/32224686
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A Comment
Hope Now's executive director Faith Schwartz is an executive at the subprime lender Option One Mortgage. Nuff said...

There are very few "third parties". People in fake law firms sit inside these offices cranking out demand letters and foreclosure letters for exorbitant fees, splitting those fees with the servicers (a legal no-no). Appraiser subsidiaries are doing multiple drive by appraisals. They own their own title companies. They are selling insurance to themselves. The only thing they have not bought to assist themselves in the pursuit of your real estate is some judges (and sometimes I wonder if they don't have a few of those, too, if truth were known).

Ms. Schwartz  is going to look like a hypocritical liar if she keeps talking. Hope Now is dominated by the very crooks that have created this mess. She is in bed with them.

Servicers/Lenders/Mortgage Market Participants in Hope Now

Acqura Loan Services
American Home Mortgage Servicing Inc. (formerly Option One)
Assurant, Inc.
Aurora Loan Service
Bank of America
Carrington Mortgage Services
Chase
Citigroup, Inc.
Countrywide Financial Corporation
EMC Mortgage Corporation
Fannie Mae
First Horizon Home Loans and First Tennessee Home Loans
Freddie Mac
GMAC ResCap
Home Loan Services, Inc. (d/b/a First Franklin Loan Services & NationPoint Loan Services)
HomEq Servicing
HSBC Finance

HSBC Consumer Lending
HSBC Consumer Lending II
HSBC Mortgage Services
HSBC Mortgage Corporation

IndyMac Federal Bank
LandAmerica Financial Group, Inc./LoanCare Servicing Center
Litton Loan Servicing
MERS
National City Mortgage Corporation
Nationstar Mortgage, LLC.

Ocwen Loan Servicing, LLC.
PMI Mortgage Insurance Co.
Radian Guaranty Inc.
Saxon Mortgage Services
Select Portfolio Servicing, Inc.
State Farm Insurance Companies
SunTrust Mortgage, Inc.
Washington Mutual, Inc.
Wells Fargo & Company
Wilshire Credit Corporation
Trade Associations

American Bankers Association
American Financial Services Association
American Securitization Forum
Consumer Bankers Association
Consumer Mortgage Coalition
The Financial Services Roundtable
The Housing Policy Council
Mortgage Bankers Association
Securities Industry and Financial Markets Association

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And I also just happened to be talking with Faith Schwartz, executive director of the Hope Now Coalition, the private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors. She expressed genuine surprise at the article's premise.

My sense is they are missing that the majority of fees assessed through delinquency are passed through third party fees--some do go to the bottom line, but many will go to the third party for appraisal information, legal fees, and title searches. Many companies have minimized ancillary fees, but there are real charges associated with foreclosure filings and use of third parties who do work regarding the delinquency.

After two years of working on this issue with servicers, counselors and investors who all want to avoid more foreclosures and REO's, my sense is this would not drive servicers to operate in a different direction than trying to modify or refinance loans to minimize foreclosure.

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Would anyone believe a car-jacker that said trust me the last thing I would want to do is try to dispose of a stolen car by the time I paid all those legal fees, ruined my reputation, and took a huge loss at the shop shop.

MS FRAUD is primie facie evidence of foreclosure profits, the homes are stolen though manufactured default and sold period, to say otherwise makes as much sense as buying the story of any kind of crime ring.

The method of profit is complex, the fees provide cash flow and bogus losses. The big money is still in securitizations and credit default swaps, as is self evidenced by how much effort is spent to discredit that assertion here on the forum, and the bailout of toxic assets. Why do they stall the foreclosures? For the same reason hot merchandise is held off the market for a while to let the action cool down before fencing the stolen property though trustee relationships.

Lets say your diamond ring is stolen and the next day you walk into the pawn shop and it's there. It's pretty easy to connect the dots but lets say the ring is laundered through a series of brokers and doesn't show up for a year or two then it's harder to prove the crime and owner in the first place, let alone track those who orchestrated the crime in the first place.

By the time the home is on the market the true homeowner is frustrated, broke discredited and unable to pursue the matter through the legal system and can't figure out who in the sytem to even pursue if they could becuase the property has apparently passed though so many hands. We here all know the crime ring is interlocking though parent corps and subsidiaries and trust realtionships.

There is no comedy of errors just a well thought out crime ring based on time proven principles.

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