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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Earlier today, we received H.R. 3837 in our off-site mail, asking that it be posted on MSFraud.  The links to the bill came with the following, in part:
 
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  We need everyone to write to their representatives in support of this bill.  Although not perfect, and I'm sure everyone will have their own critique of the bill, it is still better than nothing, and if we get the bill enacted, we can always springboard from there.
 
Don't forget, it recognizes Mortgage Servicing Fraud on a Federal Level, which is what we need first!  
 

This link should take you to the bill:  http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h3837ih.txt.pdf.

These links will take you to the two press releases on the bill:  http://kanjorski.house.gov/index.php?option=content&task=view&id=973

and http://kanjorski.house.gov/index.php?option=content&task=view&id=972.

Also, we added two new cosponsors yesterday:  Mr. Capuano (MA) and Mr. Clay (MO). 

Once posted, a sample letter, along with all the links people will need to contact their representatives will be posted to this Forum thread.

At the present time, MSFraud appears to be under attack (again) and we are unable to upload new content to the site, so we are putting the links to the bill here and will copy them to the Legislative page when this latest problem is corrected.
 
Thank you.
 
MSFraud.org
 
UPDATE:  We are able to upload content, so the links
                  to the bill and its press releases are now
                  available on the Legislative page. 
                  Our mail service is still down.
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Do You Remember
This is the bill that H.Gosh spoke of and supported ..it was a good idea then and it is a better idea now.
 
Mortgage Servicing Fraud has got to be made an issue if we are ever to get something done.

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A major mortgage lending reform bill — sparked by abuses first identified in Monroe County — has been introduced by U.S. Rep. Paul E. Kanjorski, D-11.

Kanjorski, chairman of the Government Sponsored Enterprises Subcommittee of the House Financial Services Committee, said the bill is in reaction to skyrocketing foreclosures this decade in Monroe County.

He said it also is in response to growing complaints across the nation about abusive practices related to mortgage serving and the home appraisal process — particularly for subprime loans typically issued to borrowers who don't qualify for conventional home loans.

"Far too many residents in Northeastern Pennsylvania have personally seen the detrimental effects that abusive and deceptive mortgage lending practices unfortunately had on new homeowners in the area," Kanjorski said in a written statement. "To prevent these abuses from occurring again, this bill offers a comprehensive, balanced and progressive set of solutions to solve a number of perplexing policy issues."

The bill aims to safeguard the independence of appraisers — who establish property values as part of the home sales process — by strengthening federal standards and more closely monitoring state agencies that regulate them.

It would require lenders and loan servicers who buy mortgage notes from lenders to set up escrow accounts for certain borrowers. These accounts enable borrowers to make regular prepayments for annual property tax bills and home insurance, so they don't have to pay those bills all at once.

By some estimates, more than 90 percent of prime loans have escrows, but less than 25 percent of subprime loans have them. Lenders and servicers would be required to provide disclosures of taxes and insurance to buyers who opt out of establishing escrow accounts.

The bill also strengthens mortgage servicing requirements. It prohibits servicers from establishing forced-placement insurance on loans when servicers are already protected from catastrophic loss of a home. It requires servicers to promptly credit payments from borrowers and increases penalties for mortgage servicing violations.

The bill drew praise from Maureen McGrath of Middle Smithfield Township, who represents the National Advocacy Against Mortgage Servicing Fraud. She testified at a 2004 congressional hearing on Poconos homesale problems, held at East Stroudsburg University.

"I am very grateful for the continued interest and leadership that Congressman Kanjorski has demonstrated to improve mortgage servicing and protect against inflated appraisals," McGrath said.

Michael D. Calhoun, president of the Center for Responsible Lending, said the bill is a step forward.

"Requiring lenders to escrow for taxes and insurance on subprime mortgages is an essential step to preventing families from unfairly losing their homes," Calhoun said.

Inflated appraisals and mortgage servicing practices have been identified as major factors in Monroe County's skyrocketing foreclosure rate. The problem prompted the state Banking Department to commission a 2004 foreclosure study that focused solely on Monroe County.

The number of foreclosures in Monroe County jumped from 120 in 1990 to 925 in 2002. Monroe County is on pace this year for more than a thousand foreclosure filings.

 

This article has been added to the Legislative page.  http://www.msfraud.org/law/legislative/le.html

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Moose
What they need to do is make everything other than the actual principal balance and interest unsecured debt. And they need to require servicers to accept and apply principal and interest payments and apply them to principal and interest and nothing more. No other fees and charges can be used to put a loan in default, report late payments to credit bureaus or initiate a foreclosure. If they have a case to support them when quoting a payoff, they, not the borrower, should be required to produce evidence that the amounts claimed were valid. If they can't show proof of indebtedness, they can't demand it and the principal and interest balance per the ammortization schedule IS the payoff amount, not something the servicer dreams up.

Any amounts other than principal and interest would be subject to having them prove their charges just like any other consumer debt.

Boom. There goes about 90% of the servicing scams.

With Ney out of the picture the idea might have a chance.

Moose


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Stephen

It's optimistic to assume that this legislation will eliminate 90% of the servicing scams.  Enforcement has always been a problem.  Also, such legislation can be construed as validation that the practices were not illegal prior to it.

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Joe B
Stephen-

     I don't think that anyone said that this bill will eliminate 90% of servicing scams. It was Moose who had a better idea about how to remove 90% of the servicing scams that is NOT part of this legislation, although I think it is an awesome idea!!!

     What he said is that only principal an interest can count as late payments, or towards computing any default. In other words, how many on this board have been reported late because of bogus insurance (force placed insurance), late fees, attorney's fees, inspection fees, etc. etc.? If you eliminate the applicability of these fees to count the homeowner in default in court, credit reports, on monthly statements, etc. then all the bogus foreclosures go away (or nearly all).

     I think Moose in on to something. I am not sure they all go away, but I bet most of them go away. The only problem will be if the servicer applied the principal and interest payment to these garbage fees instead of principal and interest, but that's another issue altogether.

     I like the idea Moose!!


JB
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