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 am posting this question on this forum because I am not sure where else to turn for help and information. I am hoping to draw on the members of this forum for some quick advice on how to proceed quickly in resolving this matter.  I have googled every way I can think of looking for information to help my son.  My son is home on leave from his Army AIT and needs to take care of this before he returns to post Thursday, and he will be unable to handle this once he gets back due to the intensity of his training and simply he is unavailable for anything during training. A young recruits focus is only to be on the intensive training...and the task he has volunteered is a life and death situation. Our only means of communication during training is through the mail or maybe an occasional 3 minute phone call from a phone booth...  not the time to be discussing credit card bullshit with my soldier son. 

What happened,  he had a Best Buy credit card (serviced by HSBC) ...well before he enlisted.  He had no problem keeping up with payments while he was a civilian...and used the card regularly.  Before he left, he failed to sign a financial power of attorney so I could handle his finances while he was away at training... he didnt think there would be a need since he would be home for Christmas, figured he could pay it off when he returned without a problem.  He ended up being gone an entire month longer than expected and during that time the credit card went to a collection agency called Corporate Receivables.   He started getting calls from bill collectors about this account and of course, no one would speak to me because I was not on a POA or on his account.  I ended up mailing his personal checks to him to sign while in basic training...he mailed them back to me and I in turn mailed the payment to HSBC on November 17. I also mailed several other payments that same day to other creditors...everything should have been paid OFF...nothing to screw up his security clearance...or so we thought.   I could access his checking account online so I was watching for the checks I mailed to clear his bank.  Everything but the HSBC check cleared.  Until December 15.. it finally cleared.  During this time I called HSBC and tried to find out why the check had not cleared for payment, they would only tell me that HSBC does not hold checks or payments...(YEAH RIGHT).  I finally got the guy from Corporate Receivables to talk to me about his account and he said that HSBC should  have sent him a notice that they would no longer accept payment and he could not tell me what happened to the payment.  Since the payment had finally cleared...a month later.  He received a statement from HSBC that his account was now brought current and his next monthly payment was due mid January.  Then Saturday morning the bill collector from Corporate Receivables called and told him that he needed to still pay and additional $300. by Tuesday Jan 1...or else threatened him with contacting his CO...screwing up his security clearance and such.  He told him that the payment was received and posted by HSBC...bill collector(from Corporate Receivables)  told him that it did not matter.  HSBC no longer had his account...and they had mailed him 3 letters stating that... NO LETTERS have been received since the payment was now my son is going to do a check by phone to pay Corporate Receivables just because the bill collector told him he had to OVER THE DAMN PHONE....   I dont know exactly how to advise him on this because I obviously do not trust any kind of bill collector to tell any kind of truth, especially to a young naive soldier...worried about his military career.  My son has no problem taking care of his obligation...even if they have slammed him with enormous late fees and such.  I just want to make sure he pays the appropriate party...and not have to pay off this debt twice...or more.  Also, during my talking (and to my son (and demanding the POA so I can help protect my soldier from evil creditors and their tricks)... I discovered  that while he was current with his credit card...he made several payments online..that took a month to credit to his account...when he told me that had happened to him before I was furious that HSBC had already tried to set him up for default....while he was current on his credit card. I also need to figure out how to go back and research that information and have it corrected.  All of this sounds so damn familiar with what we are dealing with our mortgage servicers and their scams...I just refuse to sit back and let them do this to my son without a fight.  I am just not sure what the best way to proceed with this matter is.  Thanks for your help with this off topic situation.
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If HSBC has sold your son’s account to a debt collector then he most likely has a Charge-Off noted on his credit reports.  The first thing I would do, while he is still home, is order up all three reports.  The information gained will give you the ammunition needed to take the next steps.


Next, go to and order Denise’s book.  It will guide you through the process.  From this point forward you need to communicate in writing with these people.  Stay off the phone – you need a paper trail.  You will also need to document the fact that HSBC was not only paid, but that the account was never in default.


Hope this helps



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Ed Cage


*Sincere* thanks Bud Hibbs!


Your information and website looks quite helpful and is

very much on topic for mainstream MSF readers!


Also I did order Denise Richardson's book based on her

consistently excellent posts in MSF.


Mr Ed

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The best credit info site I know of, helped me repair my credit a few years ago, before buying the house we're now loosing, is Credit Info Center and they have EXCELLENT forums where you can post your consumer protection/credit related questions and get answers from the pros who've dealt with all things credit repair and legal issues.  At my request, they even added a mortgage fraud section, which has alot of the info. from this site now showing there.  As the 2 issues, credit and mortgage fraud are directly related.

Best of luck, mac, and be sure to thank your son from me for his invaluable service to our country.
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I much appreciate your concern regarding your son's financial situation.  But my immediate reaction upon hearing about his circumstances is that he would have been far better off obtaining counsel from the Staff Judge Advocate (military attorney) in support of his unit of assignment.  Of course, the military is extremely STRAPPED for attorneys at this time, so it is certainly possible that no attorney is readily available to help him.  Moreover, young soldiers attending Advanced Individual Training (AIT) are seldom given enough free time nor are they afforded as great an access to legal assistance as soldiers who have graduated.

I am NOT an attorney and CANNOT give you legal advice.  But I have extensive business experience and expertise in the mortgage banking area AND I currently serve in the Army National Guard.  In that latter capacity, I work in military intelligence and hold a TOP SECRET security clearance.  So I readily understand your son's concern about his clearance status.

Generally speaking, the military is very serious about requiring its members to live up to their contractual obligations.  And that includes provisions for allotment (garnishment) of pay to satisfy debts.  But that discipline is also BALANCED by the military's interest in its soldiers being treated fairly and equitably pursuant to the law.

When your son began serving on active duty, he became entitled to the benefits of the Servicemembers Civil Relief Act (formerly the SOldiers and Sailors Civil Relief Act).  Provisions of that act are shown at the web site of the Legal Information Institute of Cornell University (  ).  The Act is generally found at Title 50 Appendix,

I am unable to give you any express legal advice as it pertains to YOUR SON's situation, but I would recommend to you particularly Section 527 pertaining to "Maximum rate of interest on debts incurred before military service":

You will find that this section provides:

(a) Interest rate limitation

(1) Limitation to 6 percent
An obligation or liability bearing interest at a rate in excess of 6 percent per year that is incurred by a servicemember, or the servicemember and the servicemember’s spouse jointly, before the servicemember enters military service shall not bear interest at a rate in excess of 6 percent per year during the period of military service.
(2) Forgiveness of interest in excess of 6 percent
Interest at a rate in excess of 6 percent per year that would otherwise be incurred but for the prohibition in paragraph (1) is forgiven.
(3) Prevention of acceleration of principal
The amount of any periodic payment due from a servicemember under the terms of the instrument that created an obligation or liability covered by this section shall be reduced by the amount of the interest forgiven under paragraph (2) that is allocable to the period for which such payment is made.

(b) Implementation of limitation

(1) Written notice to creditor
In order for an obligation or liability of a servicemember to be subject to the interest rate limitation in subsection (a), the servicemember shall provide to the creditor written notice and a copy of the military orders calling the servicemember to military service and any orders further extending military service, not later than 180 days after the date of the servicemember’s termination or release from military service.
(2) Limitation effective as of date of order to active duty
Upon receipt of written notice and a copy of orders calling a servicemember to military service, the creditor shall treat the debt in accordance with subsection (a), effective as of the date on which the servicemember is called to military service.

(c) Creditor protection
A court may grant a creditor relief from the limitations of this section if, in the opinion of the court, the ability of the servicemember to pay interest upon the obligation or liability at a rate in excess of 6 percent per year is not materially affected by reason of the servicemember’s military service.

(d) Interest
As used in this section, the term “interest” includes service charges, renewal charges, fees, or any other charges (except bona fide insurance) with respect to an obligation or liability.


Similarly, Section 523 of the Act provides for the WAIVER of penalties by Court order where a servicemember's military service materially affected his ability to perform under the contract.

It appears to me that your son needs to IMMEDIATELY invoke his rights under the Servicemembers' Civil Relief Act.  And that would seem to me to include a demand for recoupment of interest in excess of 6%.  Moreover, I think that your son should at least CONSIDER bringing an action in SMALL CLAIMS COURT to recover by COURT ORDER any penalties assessed under Section 523.


There may also be some other protections available to your son through state or national debt collection laws.

While bill collectors are great at THREATENING and INTIMIDATING people.  Very often these threats are HOLLOW.  In most jurisdictions, a corporation MUST be represented by an attorney even in a small claims action.  If your son files suit, it will COST Best Buys and/or the bill collector or BOTH more to DEFEND against the suit that the amount at stake.  They will either SETTLE or FAIL TO APPEAR resulting in a default judgment against them.

My GUESS is that your son has MONEY COMING BACK TO HIM rather than owing any further amounts.

To the extent that Best Buy or the bill collector makes a FALSE report to credit reporting agencies, there are other litigation strategies that may be employed.

Your son should bear in mind that no matter HOW intimidating his Company Commander appears, his CO is his ALLY in this matter and is NOT going to automatically side with the creditor.  That being said, the CO IS going to want to minimize the time and bother associated with the matter.  He is NOT going to want it to be a distraction from your son's training or mission.

As to the matter of the security clearance, the KEY THING is for your son to be HONEST and FORTHCOMING about his situation.  The Office of Personnel Management (OPM) and the Department of Defense are well aware that situations arise wherein a consumer DISPUTES an amount with a creditor.  This will NOT impair your son's ability to obtain a clearance UNLESS he tries to CONCEAL the matter or is LESS THAN FORTHCOMING about it.  This is particularly TRUE where he obtains the assistance of the Staff Judge Advocate.  If he obtains legal assistance and is following the guidance of a lawyer, OPM and the military can hardly hold this against him where he has been honest and forthcoming.  If anything, your son's reluctance to DISCUSS the matter with his CO suggests an evasiveness that can create a problem where no problem existed.

Bear in mind that the military spends tens of thousands of dollars to recruit and train young men for various assignments.  A CO who ALLOWS soldiers to FAIL without seekign to help is going to have a very short career!  I think your son may be ASSURED that no matter how tough that CO might appear, he really has the interests of his young soldiers at heart.

Feel free to contact me directly via e-mail OR to have your son contact me directly through AKO.  I am in the AKO white pages.  I already have my twenty year letter and have well enough weight on my color to feel quite comfortable going to bat for any young soldier in need of assistance and support!
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That was excellent (and accurate) information Mr. Roper.  As a prior holder of a SCI clearance as well as a former member of the JAGC I agree with your sumation of how the military system works.  Within the Judge Advocate Corps there is a section that directly deals with "civilian" or non military matters.  We always took special interest in (many of us took it "personal") companys that tried to prey on our soldiers.  I don't think that this has changed one bit in the 25 years that I have been out.

The bottom line in this case is:  Get the soldier in to see his JAGC officer NOW!  Be completely forthcoming and provide that officer with any and all documents that he/she requests.

There are laws in place to protect our service members and people in place to see that these laws are enforced.

God bless all of you who chose to wear the uniform!
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Thank you for all of this great advice.  We will get busy working on these steps immediately...while I have him at home.     Thanks again for all of your support. 
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My Previous Post of 12/30/2007 at 05:29 PM
When your son began serving on active duty, he became entitled to the benefits of the Servicemembers Civil Relief Act (formerly the SOldiers and Sailors Civil Relief Act).  Provisions of that act are shown at the web site of the Legal Information Institute of Cornell University (  ).  The Act is generally found at Title 50 Appendix,

In preparing the previous post, I had intended to include the main links to Cornell Legal Information Insitute ( ) and to the United Ststes Code ( ), as well as the Servicemembers Civil Relief Act at:


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4 justice now

I too, totally agree with William A. Roper's post. The CO of the Base that I support was responsible for implementing various mandates/restrictions regarding payday lending (scumbags), so I may have access to additional information in this area, if needed.   

Just let me know if it is necessary and I will call the Base JAG.

Best of luck to you and your son!


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Thank you all again.  I cannot begin to express how much your support means to me. This gives me great comfort in knowing that my son's choice to join the military was the absolute right one!!   Apparently JAG spoke to the recruits during basic training and informed them that they were eligible for assistance with their interest rates and such.   I was relieved to know that was part of their basic training.  

We ordered copies of his three credit reports and he disputed HSBC as he made a payment in November...(December when it posted).  That payment was not showing updated on the credit reports.  His credit reports show he was current up until he was in training, so at least that part is correct.  And the Army has already checked his credit (on his ship date).   But with his MOS, I am sure that is only the beginning of his security clearance.

He received a letter from Corporate Receivables on Tuesday afternoon offering a 20% settlement reduction. The letter also states that he has refused to cooperate, when they just received a payment from him.   My son wanted to take care of this quickly, and then when he returned to post...approach JAG after the debt had been paid off when he was not in such intensive training.   He called the bill collector back to make his payment over the phone to hurry up and get it taken care of.  The bill collector told him on the phone,  "he was retarded for wanting to pay the settlement it would ruin his credit for a $60 reduction."  and when my son replied that "he just wanted to pay them and could he do a check by phone?" The bill collector began asking for his check information and first asked my son for a work phone number...when my son said "why do you need a work number?'  the bill collector said "I tried to help you, but you refused and I am reporting to my client that you are refusing to work with us" and he hung up on my son.  My son then called him back...and got his voicemail...left him a message and told the bill collector he was being immature.     I told my son,, that is exactly why NOT to talk to them on the phone.  But with the time constraints, he just wanted to pay this and get past it and NOT WORRY about it anymore.   Now he has no idea who to pay since this happened.  We documented everything said in the phone call and have copies of all of the letters.  I am sending that information with my son tomorrow when he leaves to report back to post and keeping back up copies here at home. 

He is worried about taking the time out of training to talk to JAG.  He has lots of important qualifying to do as soon as he gets back.   I hope he does go to JAG before they approach him.  I wish I could go with him, just because I dont think he  understands what is happening to him.    He did promise me that first thing he will get that POA.   

4J, thank God they made those changes to payday lending.  I live near WPAFB and there are more payday lenders here than gas stations.  I am glad they are no longer allowed to take advantage of our military.  I am sickened that many of these bottom-feeders see a uniform as an easy mark.  I just read a story about a soldier committing a robbery to payoff some $30,000 in payday loans.  His whole life is now ruined because of being sucked into such a trap.   And thanks for your offer to help him.

WAR, I will have him contact you through AKO. 

Way To Go, I am going to order that book for him to read and share with his platoon.  They pass around reading material when they have freetime...and that will be a GREAT idea for all of them to read!!!  Our soldiers need all the protection they can get!!

Thanks to all of you for your help with this and quick responses!!!  I showed my son my post and all of your helpful responses and pointed out that he is NOT alone in this and how we are all looking out for each other.   We have been fighting the msfraud  together and positive changes are happening and you guys are the reason why.. I am thankful to be part of this great board and appreciate you all!!!  Happy New Year!!

Super Proud Army Mom!!!

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MAC, Thank you for the kind words and I wish you and your son the very best!

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Just wanted to step in and tell you that there are a lot of us out here that appreciate sons like yours.  God bless. 

And daughters.

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Ed Cage


Dear mac:

WAR has a very high rank in the National Guard and I was so

pleased to see him step in and help you as he has for so many

in here to whom he has repeatedly and unselfishly given his



I want to share the sentiments of Bob Schmidt and Way to Go

in telling you just how much we all appreciate soldiers like your son.

I know as a former soldier there are times when you feel forgotten..



God bless,

Ed Cage

US Army 1966-1969 *Volunteered*

Vietnam (Tet) 1967-1968

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