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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Joe Thompson

I was laid off for a few months and fell behind on the mortgage and now my house is in foreclosure. Its set to be auctioned off the end of this month. I have the money now to pay off the default balance and all the fees, but my mortgage company now will not give me the total amount to pay. They told me they will not accept any under or over payments, and that I have to have the exact amount, but yet they wont give me that amount. Isnt there any laws against this or anything I can do? Should I hire an attorney just to make the default payment? I dont want to lose my home and Im running out of time. I have only 8 days left to pay the amount and fees in default, or I will be in the ten day window before the auction and I would have to come up with the full amount of the loan. They are trying to steal my home at this point.

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Stephen
Unfortunately, this is standard practice for taking your home and there's nothing you can do about it.  An attorney will most likely make it worse.  They are opportunists and missing a payment leaves the doors wide open.  They know you have no defenses and you're easy pickings.

At this point, keep your money and walk away.
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Joe

Its legal to do that? What good are laws if they cant be enforced?

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Joe, regardless of who the servicer is, ultimately you should have competent legal counsel knowledgeable in mortgage servicing fraud examine your entire deal now. You're most likely going to need an attorney to file a Temporary Restraining Order for you if you want to stop the sale of your property. May as well hire who you need from the onset so you only have to explain the story once and they only have to get up to speed once.

It would also behoove you to read your note beginning to end and at this point pay particular attention to sections pertaining to foreclosure and redemption. Depending on exactly what your note lays out for contractual procedure you may have a possible breach action on your hands. Only an attorney would be able to tell you that for sure though.
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Stephen

Legal counsel:  $250 an hour.  Figure 20-$50k to fight them.  And you'll lose.

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Joe B
Joe-

     Before you get too far ahead of yourself here, follow Mike's advice and look at your note. Also look at the paperwork they sent to you; all of it! You SHOULD have a right to reinstate the note under certain conditions. The note will also spell out what rights you have to reinstate. Specifically, if you bring the note current...

     You also have other options that you should consider carefully. However, if you have the amount necessary to get current, I am not sure they can refuse it. They also cannot refuse any over payments. They may not know what to do with the money, but applying it to outstanding principal, interest, and fees seems appropriate to me. They can then put the rest in a suspense account; most of us on this board know all about these!! HA...

     This is a tricky time, because they have most of the power. However, if this property has value to you (financial or emotional), you should explore and exhaust all of your options before you walk away. It does not need to cost tens of thousands in fees to fix this, but it may if you are dealing with a less than reputable mortgage company/servicer!

     Look at the paperwork, interview a few attorneys, and explore your options. Let us know how we can help!

JB
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Stephen wrote:

Legal counsel:  $250 an hour.  Figure 20-$50k to fight them.  And you'll lose.

Stephen, none of these statements are necessarily true. I'm proof of that so far. Competent attorneys can be found at a cheaper hourly rate and more and more of them are taking MSF cases on contingency. And they're taking them on contingency because more and more of these cases are being won by MSF victims.

But if you aren't motivated enough to educate yourself and work on your own case and are willing to let your attorney make all of the decisions instead of making sure that s/he is working for you - then of course you stand a better chance of losing.


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Joe

I have contacted quite a few attorneys today, and basically got the same answer. "File chapter 13 bankruptcy". They said Im better off doing that than contesting the sale because of the timeline. Does anybody agree with that? I have the money to pay the default balance and Im being told to file bankruptcy. Im really confused at this point. Im being strongarmed to either lose my home or file bankruptcy.

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Joe B
Joe-

     Bankruptcy is one of the options I eluded to in my earlier post. However, only you can decide if that is the right path. I will tell you that the mortgage company is only going to begin piling on even more fees while this process lingers, and that could cost you almost as much as fighting this issue. It is a bit of a crap shoot if you ask me; plus you add on all of the other issues that begin once a BK filing is done! (my opinion!)

     You have options to contest the foreclosure. Again, as Mike said and as I mentioned, you will need to get up to speed on the documents; they will outline what remedies you have available. Chapter 13 is expedient, but maybe not the best choice. You likely have the right to reinstate the note right up until the time of the actual sale simply by paying any past due payments (likely plus fees). Most jurisdictions allow this without contestation. After all, if you can sure the default, why would the court allow the sale to continue? (this is not an absolute, but in general). Again, the documents will guide you!

     However, none of us here know what the documents say. Only you (and hopefully a competent attorney) can guide you through this next phase. However, don't delay.... dig into the docs, and speak to an attorney who "gets it" to help you stop the process. I think someone mentioned a temporary restraining order enjoining the sale. This would likely be your goal, but there might be even simpler options depending on the documents. Please review them to see what options you may have.

     Let us know how we can help!

JB
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Joe, what you are looking for is an attorney with consumer protection experience, preferably familiar with FDCPA, FCRA, RESPA, banking/securities/anti trust, etc. All the better if they have contract law experience as well because one thing that attorneys seem to overlook is the simple fact that a mortgage is nothing more than a contract. If nothing else, you might want to find out who previously handled consumer protection and anti trust for your AG's office and see if they are still practicing privately.

It CAN be confusing to talk to many attorneys out there. It took me more than 150 firms before I found two that 1.) understood the facts of my case 2.) were willing to take the time to listen to me and 3.) didn't want one of my kidneys upfront as a retainer but they ARE out there. The bankruptcy answer is a legitimate answer but, in my opinion, it is a lazy answer. Chap 13 should be used only when all of your other options have been tried and failed.

Get your hands on your note and read it start to finish. Pay particular attention to any sections dealing with "property preservation" fees, foreclosure and redemption after default. Make note of any terms in it that you feel are being violated.

You might want to get your state Banking Dept involved at this point as well.

What state are you in? Someone here may be able to give you a name or two. If nothing else, try http://www.martindale.com and use the "advanced search" function there. "Consumer protection" should be your first search.
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