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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Home Wrecker 4

Protest highlights loan-modification issues


Last week, the activist nonprofit ACORN protested in Manhattan against what the organization dubbed the “Home Wrecker 4” – four major mortgage servicing companies that have not signed up for President Barack Obama’s plan to modify loans of distressed homeowners.

But hold on -- borrowers should know that they can still have their loans modified even if their lenders and servicing organizations aren’t on the Obama plan.

Many homeowners have been confused, asking for the Obama loan modifications of lenders that haven’t signed on and angry at lenders not on the plan because they think it’s their only chance for mortgage salvation.

The Obama loan modification plan dictates what mortgage changes the lender, servicer and homeowners must take and in what order.

This series of steps is what the Obama administration believes is the best way of rescuing homeowners and giving them the ability to pay off mortgages over the long haul.
The plan also provides homeowners and lenders financial incentives on each loan that’s modified and each loan that stays current.

Lenders and servicers outside the plan have more flexibility on what changes to make on the terms (interest rate, length of loan, etc.) of a homeowner’s mortgage.

These modifications can follow the Obama plan (they just won’t get the incentives), can improve upon the Obama plan and also be unpalatable, not enough to rescue homeowners.

Even before Obama unveiled his plan in February, many lenders and servicers were already modifying loans.

For example, the Obama plans calls for a three-month trial period on new payment plans and if all goes well, the homeowners get the modifications permanently. But some lenders and servicers were already doing that before the federal plan was unveiled in February.

There have been complaints about lenders and servicers on the Obama plan not following the plan and also complaints about nonparticipants balking at loan modifications.

The difference is that the federal government can put more weight on Obama plan participants when homeowners and nonprofits like ACORN complain about them.

The “Home Wrecker 4” are  Litton, a major servicer, American Home Servicing, HomEq Servicing and One West Bank, the latest reincarnation of the failed IndyMac bank.

So far, 20 lenders and servicers have signed up for Obama’s Making Home Affordable plan.

-- Ellen Yan

(Getty Images Photo)

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And those are the four that the FTC should be investigating the hardest!
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