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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I'm confused!  Got a call from OCWEN stating that the terms of our mortgage has changed. We were told that our government insured mortgage file code 102780 is about to expire and we need to purchase private mortage insurance.  Our mortgage was originated in 1999 and is a 30 year, fixed rate.
Our home is appraised at $227,000.00 and we owe $115,000.00.
Has anyone ever heard of this?  What do we do? They did say they may be willing to refinance our mortgage.
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Well, I can see why they'd want to change the terms.

Fixed rate 30 years does not make them the money that an adjustable
rate does.

What did they say was changing?

I would be reluctant to believe there is a provision in your mortgage to
change the terms.

Dig out your documents and read them.

PMI is usually not required after 20% of the mortgage has been paid.  At least, I have never heard of it changing.  This article does mention that
your home cannot have fallen in value.  It seems you owe 50% of the of the value of your home.

Below an article on PMI.  Type PMI into your web browser.  There are lots
of web sites.

The lender is supposed to cancel the PMI once you hit the 20% pay
down of the loan. 

It seems to me that Ocwen is trying to pull a fast one on you.

Arm yourself with facts before you speak to them.

Deal with them by letter so you have a permanent record.

Any questions, let us know.


MAIN Arrow to HomeYour Money Arrow to Auto, Home, Health, Life InsuranceInsurance Arrow to Liability Insurance PMI Private Mortgage Insurance

Along with all the other costs of buying a new house, most homeowners - especially those just starting out - can expect to pay additional private mortgage insurance, better known in the banking community as PMI.

To protect themselves, most banks will require that borrowers pay for PMI if the loan they take out is more than 80 percent of their home's value. In short, buyers with less than a 20 percent down payment are normally required to pay PMI.

The main benefit to consumers is that they don't have to wait to save for a large down payment before they purchase their new home. Then, once the mortgage is paid down to where their home equals less than 80 percent of the original purchase price - they can, under present law, cancel their PMI payments.

Since borrowers mistakenly continue to pay for PMI beyond the required time, new regulations call for lenders to cancel PMI automatically once the loan is sufficiently paid down.

As with all most banking transactions, there are some caveats. Generally, borrowers must in good standing when it comes to repaying their mortage loan, and their property must not have decreased in value below the original purchase price in order to be eligible for PMI cancellation.

On the Web, find out more about the advantages of PMI and what it may cost you, related questions to ask your lender, along with other expert consumer guides incuding tips, advice, facts and information on personal mortgage insurance...

Private Mortgage Insurance (PMI) - Excellent consumer guide available online or downloadable in PDF format covering the benefits of PMI, details on requirements and cancellation regulations under the Homeowners Protection Act.

Private Mortgage Insurance (PMI) - Yahoo! Finance - Extensive information on the topic including examples of how PMI works, tips on keeping track of payments, how to avoid PMI, with links to related story features.

Questions on Mortgage Insurance - General overview of the mortgage insurance industry with additional facts and information on PMI, from the Mortgage Professor.

Mortgage Insurance Companies of America - Industry assocation with PMI basics, related video presentations, interactive rate calculators, FAQ, glossary.

Understanding PMI (Private Mortgage Insurance) - A discussion on PMI benefits to both the lender and borrower, Homeowner Protection Act regulations, related links.

Does mortgage insurance make sense? - Expert tips from CNNMoney.

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Be aware, that is usually the beginning of the "Manufactured Forclosure" process.  Get an attorney, and look at a "Breach of Contract" suit.  Start early, Ocwen may not be around too much longer.

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VA loan or FHA?

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We have an FHA loan. Current on payments. House was just appraised in January 2008. We never had mortgage insurance. All they said was that, and this is a quote: The government insured mortgage File code 102780 is about to expire and the terms of your mortgage is changing".  They have our balance owed as $10,000 less than we actually owe. I looked at our mortgage and there is nothing about changing terms of the mortgage at any time.  We don't even have a pre-penalty for paying off early.
I don't want to talk to them on the phone. Can't understand them anyway - they sound foreign.
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I made a search for FHA, File code 102780

it seems that the FHS has loans sorted under certain file codes.
I would contact the FHA to find out what that Owcen means with that
notification. They may be able to give you some insight how to proceed.

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sorry, I meant FHA throught my post..the typo devil hit again

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maggie wrote:
...I don't want to talk to them on the phone. Can't understand them anyway - they sound foreign.

They are foreign. Ocwen operates call centers in India.

I would first contact the local HUD/FHA field office and then start looking for a local attorney who is familiar with Ocwen but has not represented them. 

If you have to communicate with Ocwen, do it via RESPA QWR (Qualified Written Request) letter, and whatever you do, pay whatever it is they change it to to avoid getting the check back in the mail and the default status on your credit that will kill any chance of a refi.


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OK.  In the mail today, we received a letter from Priority Financial Services that said OCWEN referred us to them for refinancing.  They noted "your government insured mortgage, file code 102780, is about to expire.
Their address is in Owings Mills, MD, but the postmark is from West Palm Beach, Florida.  Has anyone else received this or heard about this?
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4 justice now

I really don't want to upset you at all, but I do suggest that you get as prepared as you possibly can for a battle to save your home and your credit. Ocwen is one of the absolute worst of all the MS Fraudsters. To say the very least they can never be trusted in anyway what-so-ever. They may even claim they want to help you, but what that really means is that they want to help themselves to all your equity and savings and whatever else they can extort. And as a reward they simply destroy your credit and welcome you to a life that may never be the same. 

If anyone at that vile organization claims they wish to help...  believe me nothing could ever be further from the truth. It has been over eight years now since I first heard their pathetic name.... and to this day I still cannot fathom how such a blatantly corrupt and criminal enterprise could have been allowed to exist in this, or any country for that matter. Forget the phone! absolutely everything must be in writing. Record everything, and get a witness if it's at all possible.

Currently, they appear to be on the brink of financial collapse, but they've been there before and have survived just to lie, cheat and steal another day, and so many more. I'm truly sorry about being so blunt, but it's the only way I know how to prepare you for what could very well happen. Please listen to many of the others here who can guide you so much better than I. I truly hope that I'm wrong on this one. But either way I do wish you the very best of luck!

My Opinion Only.
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Dear Maggie,
    On an FHA mortgage, the mortgage insurance expires after five years
as long as your equity is 80% or more. Since your equity is more than that'
you don't need mortgage insurance at all!
    Are you sure they were talking about "mortgage insurance"? and not
"home owners" ie fire insurance?

     The best way to solve this problem is to read the original Note and
Mortgage. Also look at the "Truth in Lending" form you were given at the
closing. It should show only five years of "mortgage insurance".

      Good luck dealing with Ocwen. I had them for six years. They are the
worst. It could be they are trying to shake you down for "mortgage insurance" you don't need like they tried to shake me down for" home owners" insurance I didn't need. It could also just be incompetence, ie they don't know you no longer need "mortgage insurance". Get legal help early!
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oh Maggie,
   One thing I forgot to mention, if you pay mortgage insurance longer than
five years, you may be owed a refund. Check into it!
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Generally, I CONCUR with sound posts above, particularly those of Moose and Mike H.  But the KEY thing to do is to find your copy of the promissory note and mortgage and/or deed of trust.  The contractual terms therein together with the laws of your state are going to be binding.

Generally, most mortgage investors do NOT require mortgage insurance for loans with loan-to-value (LTV) ratios below 80% for OWNER OCCUPIED properties.  Primary mortgage insurance IS (or once was) sometimes required for vacation homes and/or income properties at somewhat LOWER LTVs, but last time I checked (which was YEARS AGO), most mortgage insurers had exited the market for PMI on income properties.

Moose's suggestion about making inquiries via QWR letter is on the mark.  I would ask very specifically for the mortgage servicer to identify the contractual or statutory basis for its assertion that PMI is required.  And ASK to see their copy of the specific applicable language of the promissory note and/or mortgage.

FNMA and FHLMC notes and mortgages tend to be fairly standard.  Their standard forms are available online.  The instruments used by predatory subprime lenders vary more and include a variety of oppressive features.  Look to the iinstruments to understand your rights, but as Moose points out, you may need to consult an attorney to better understand these rights.  But I would go to the attorney with the instruments IN HAND. 
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4 justice now
AND THE FRAUD CONTINUES... (Please see article posted below)
How could anyone who possesses even a trace of intelligence ever recommend buying stock in such a miserable excuse of a company?
It's obvious this so-called "mortgage servicer" will never possess the level of liquidity that it will take to cover its (clearly justifiable) financial liabilities. They are being sued by just about everyone that has ever had the extreme misfortune of having any kind of contact with them at all.
After all, homeowners, vendors, investor's, cities, counties, states and many, many more are all suing these scumbags.  But, according to this brainiac, chowder-head they have stock worth buying.
Does this person have any idea of what this corrupt, criminal enterprise has done? Is it humanly possible for him not to be aware of all the homeowners that have been intentionally defrauded out of their homes and/or savings, in about the worst way possible? Could he not know that they are directly responsible for wanted destruction of countless lives, families and marriages. 
Can the corruption associated with this cowardice predator possibly be any more blatant?   
"Of course, this is my own opinion regarding Ocwen and those who aid and abet them".
Associated Press
Ocwen Financial Stock Up on Analyst Note
Associated Press 04.14.08, 11:48 AM ET

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Shares of Ocwen Financial Corp. surged Monday after an analyst said he expects the company's loan-servicing business to post "respectable" results amid the disruption in the mortgage markets.

The stock of the West Palm (nasdaq: PALM - news - people ) Beach, Fla.-based company rose 32 cents, or 8.7 percent, to $4.01 in late morning trading.

In a client note Monday, Piper Jaffray (nyse: PJC - news - people ) analyst Robert Napoli said he believes the growth in delinquencies and advances has slowed and Ocwen anticipates the trend to continue throughout the year.

At the end of the fourth quarter, nonperforming loan balances and foreclosed properties comprised 20.8 percent of the company's loan-servicing portfolio.

At the same time, the analyst expects the company's debt-collection business to grow.

Additionally, Napoli said the company has successfully expanded its borrowing capacity to meet the increase in advances of delinquent borrower payments. In February, Ocwen increased the maximum borrowing capacity on one facility to $200 million from $140 million and extended the maturity to 2011.

The analyst maintains a "Buy" rating on the stock and estimates earnings of 15 cents per share in the first quarter.


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4 justice now,

Robert Napoli has been an Ocwen apologist for years. I am not able to figure out why this guy apparently sold his soul to prop up this pile of dung. Maybe Napoli is a dung beetle that needs a steady supply of fresh excrement in order to live?

Jim Fowler at JMP Securities, former OCN employee, did the same thing in late 2003/early 2004 with a "Strong Buy" recommendation for OCN that defied all market indicators. And people bought it in spite of warnings from the "little people" i.e. "US". Now they are wiped out. Too bad.

Remember this gem from American Banker? Napoli listens to the executives and tells everyone that everything is fine, there is no comparison with Fairbanks. "OCN is a thrift with rigid OTS oversight" (I laughed most of my brains out at THAT jewel). That is no longer true; OCN has debanked since then. "OCN had not been downgraded by the liar's club commonly known as ratings agencies"; no longer true. Yet Napoli drones on with his own version of reality, still making excuses for the steaming dung pile in FL.

Maybe Napoli truly believes that defaults are slowing and that OCN will make up the difference in it's debt collection arm. Maybe it will. I said years ago that all these scammy servicers would close and resurface as debt collectors. That is really all they ever were, anyway. But Napoli's refusal to see that the foreclosure tsunami is not abating seems to mean that he is able (along with many politicians) to live outside reality in a sort of Twilight Zone of his own making.

People like this really feel that if they repeat the lie often enough and loud enough that the endless repetition will force the lie to become the truth. This mindset is not working out too well for America these days. Reality just keeps intruding on their ivory towers. They won't get it until the foundations of their towers crumble from under them.

Some Fairbanks Critics Now Focusing on Ocwen Financial

American Banker Monday, November 17, 2003

By Erick Bergquist

Now that Fairbanks Capital Corp. has settled with federal regulators, consumer activists and class action lawyers are focusing on another subprime servicer, Ocwen Financial Corp.

They accuse Ocwen of abuses such as unnecessary forced insurance and excessive fees similar to those allegedly committed by Fairbanks, the Salt Lake City firm that the Federal Trade Commission and Department of Housing and Urban Development jointly investigated this year.

Lieff, Cabraser, Heimann & Bernstein LLP filed a complaint last month against Ocwen, of West Palm Beach, Fla. The San Francisco law firm was a co-lead counsel in a consolidated class action against Fairbanks that was covered by the federal settlement.

Daniel J. Mulligan, a partner with the San Francisco firm Jenkins & Mulligan, another co-lead counsel in the consolidated Fairbanks case, said he plans to file a class action complaint against Ocwen in a California court this week. The complaint will expand on one he filed in December of last year, with additional allegations against Ocwen.

Ocwen was the fifth-largest subprime servicer at midyear, with $33.5 billion, according to National Mortgage News.

Ocwen would not make executives available for interviews. But Robert Napoli, an analyst with U.S. Bancorp Piper Jaffray in Chicago, said executives at Ocwen have told him there are several key differences between their company and Fairbanks.

Ocwen services loans through a federally chartered thrift subsidiary, which is regulated by the Office of Thrift Supervision. For this reason, 'there is a lot more review going on than there was at Fairbanks,' Mr. Napoli said.

Also, Mr. Napoli said, Ocwen officials told him that the company has not grown as quickly as Fairbanks in recent years. Fairbanks has said rapid growth was one reason for its problems.

And Ocwen has not been downgraded by any of the ratings agencies, its executives pointed out to Mr. Napoli. Fairbanks was downgraded by all three agencies in May and has been unable to take on new servicing business since then.

Fitch Inc.'s last report on Ocwen came out last December, before the problems with Fairbanks surfaced. Ocwen got Fitch's fourth-highest rating, 'level two,' for ability to service subprime and distressed loans. The reason, said Kathleen Tilwitz, an analyst at the agency, was financial difficulty.

Fitch is now evaluating the company for its annual review and will issue a new rating within 30 days, Ms. Tilwitz said. 'We have been in there within the last month, and we have been informed about' allegations of predatory servicing similar to the complaints about Fairbanks, she said.

Fitch is looking for Fairbanks-like problems at all the servicers it is reviewing, Ms. Tilwitz said.

Josh Zinner, the director of the nonprofit South Brooklyn Legal Services/Foreclosure Prevention Project, said the 'fundamental problem with subprime servicers' is that as contractors for Wall Street bond issuers they do not answer to consumers.'

In a normal marketplace, if a company has abusive or obnoxious customer service, they are not going to get any business,' Mr. Zinner said. 'But with these contract servicers, the customers have no choice about who services their loans, so there is no incentive to work with customers in a reasonable way, only to maximize collections with aggressive practices.'

Brigitte Amiri, a staff attorney at South Brooklyn Legal Services, said that Ocwen often charges customers more than once for the same service when they refinance.

When one of her clients refinanced into a reverse mortgage, she said, Ocwen charged the new mortgage holder - not the borrower - more than $1,000 in repetitive fees. That would have cut the borrower's refi proceeds.

Ocwen listed four different fees - a legal fee, a foreclosure fee, an attorney's fee, and a disbursement fee - all for the same service, Ms. Amiri said. Ocwen corrected the overcharges, but her colleagues at South Brooklyn told her Ocwen did the same thing to their clients.

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Correction to response to Maggie:

I meant to say 20% not 80% with regard to the amount of equity you
need after five years to be able to dispense with mortgage insurance.
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Be sure to look at your closing docs, (HUD-1) to see if there are ANY provisions stating that you are ALWAYS current when making your mortgage payments.
Wells Fargo, in at least one situation that I have noticed, states that the borrower can not be late on a mortgage payment to be able to cancel PMI.

Just an FYI.
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I am just like everyone in here. My loan was sold to ASC in about the 3rd month after I bought my home. Ever since then I have had nothing but troubles with them. My loan went up (ARM) and I had to file ch.13 just to save my home because they would not work with me. Within the first 3 months, my loan was changed 5 times and I ended up with ASC. I had decent credit but now my BK will take care of that. ASC and the suspense account is a joke. I have a first and a second and when we send in our payments, on a couple of occasions, they put both checks on one mortgage. Then I have to call them and we all know how that is, and make sure they find it before they SCREW me again. I am willing to join a class action if anyone has info for me please e-mail me. I live in Texas.

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