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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Last Friday we met with a Title person who walked us through signing our paperwork for a refinance.  The refinance had us paying off some credit cards and also receiving $1300 cash -- this is all on the HUD-1A form.

Today we get a packet with checks to pay off the cards and a check for $1105.  Also included was a revised HUD-1A form with a $195 Warehouse Fee entry and instructions that we needed to sign this one and send it back to them.

Well this is a BS fee and I'm angry at being against the wall to accept it.  How do I dispute it?  They've already paid off our original loan and sent us checks -- so it's up to us to convince them to send us the $195 fee.  Do I take them to small claims court or what?  What's my recourse?

I know this is small compared to many of the big problems people have had.  I'd appreciate any advice.

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Hmmm...I wonder what they would do if you didn't pay the $195 fee?  Probably try to add it in as a "misc. fee" but...

The real question is: do you really want to deal with these people for the life of this loan?

I would really think long and hard before going any further.

S
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Big Mac

sounds like predatory lending to me.

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Big Mac
Big Mac wrote:

sounds like predatory lending to me.

You better make sure they paid the insurance. next they will sell your servicing. I would not sign anything.
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Not an attorney
Irate wrote:

Last Friday we met with a Title person who walked us through signing our paperwork for a refinance.  The refinance had us paying off some credit cards and also receiving $1300 cash -- this is all on the HUD-1A form.

Today we get a packet with checks to pay off the cards and a check for $1105.  Also included was a revised HUD-1A form with a $195 Warehouse Fee entry and instructions that we needed to sign this one and send it back to them.

Well this is a BS fee and I'm angry at being against the wall to accept it.  How do I dispute it?  They've already paid off our original loan and sent us checks -- so it's up to us to convince them to send us the $195 fee.  Do I take them to small claims court or what?  What's my recourse?

I know this is small compared to many of the big problems people have had.  I'd appreciate any advice.

Don't cash the check. Call them and tell them they sent you the wrong amount and that they can't change a deal after it's signed. Give them a week to get you the $195 and then sue in small claims court if they don't.
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Stephen

I'd just throw the papers in their face and walk.  They always try to stuff the loan at the last minute and hope you won't notice it.  Most people don't catch it.  File a complaint with the FTC.

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Moose
Irate wrote:

Last Friday we met with a Title person who walked us through signing our paperwork for a refinance.  The refinance had us paying off some credit cards and also receiving $1300 cash -- this is all on the HUD-1A form.

Today we get a packet with checks to pay off the cards and a check for $1105.  Also included was a revised HUD-1A form with a $195 Warehouse Fee entry and instructions that we needed to sign this one and send it back to them.

Well this is a BS fee and I'm angry at being against the wall to accept it.  How do I dispute it?  They've already paid off our original loan and sent us checks -- so it's up to us to convince them to send us the $195 fee.  Do I take them to small claims court or what?  What's my recourse?

I know this is small compared to many of the big problems people have had.  I'd appreciate any advice.


Title insurance companies are regulated by the states. This isn't legal advice but you might get some direction from whatever agency in your state is in charge of insurance companies.
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Knows About RESPA
I think Moose has a sound approach here.

But I would encourage you to take a close look at two other documents, too.  First, take a look at the Good Faith Estimate and any application or contract that you might have signed at application.

IF it was DISCLOSED TO YOU that there was going to be a "warehousing fee", then you may be obligated to stick with this bargain.  That is if you had implicitly or explicitly AGREED to pay the fee and then it was overlooked at closing, you are likely to find that you are stuck with the bargain, even a bad bargain.  By contrast, if this fee was NOT disclosed to you and then belatedly ADDED as a trash fee, you are in a much stronger position.

A second thing to look at is the Truth-In-Lending Statement.  You would probably need some professional help looking this over.  But as I recall, the Fed's regulation is rather explicit about what can be EXCLUDED fromthe portion of the fees implicitly identified as finance charges and which MUST be included in calculating the loan's APR.  As I recall, certain fees actually paid to third parties such as cost of credit report, appraisal, title search, title opinion, title insurance, etc. can be EXCLUDED.  Other fees such as "underwriting fees", barber fees for the loan officer, theater tickets for the receptionist, Fed Ex charges must be INCLUDED in the APR calculation.

PLEASE BEAR IN MIND THAT I AM WINGING THIS FROM MEMORY.  LOOK IT UP IN THE FED'S TIL REGULATION.

Bottom line is that the TIL disclosure needs to MATCH the fees.  When the fees or finance charges EXCEED what is disclosed the lender can be REQUIRED to adjust the terms of the loan to confom to the disclosure.

You also need to consider RESCISSION.  This is very often problematic when you really need the financing.  But particularly when exercising your three day right of recission under Regulation Z, you are typically entitled to retrnof ALL amounts paid, INCLUDING as I recall the money for the application fee, credit report, appraisal, etc.  But once the regular recission period EXPIRES, then this opportunity is LOST.

I think the recission period begins with the execution of the instruments and completion of ALL of the disclosures.  (VERIFY this.)  Where the closing agent is belatedly ALTERING terms of the transaction this MIGHT extend the recission period by tolling the start of the period.  YOU NEED TO CHECK THE CASE LAW ON THIS.

One thing to bear in mind is that as much as you need the refinancing, rescission is the nuclear defense to this nonsense.  Typically, the lender has a lot of sunken costs in the transaction by closing which CANNOT BE RECOVERED when you rescend.  And the lender is typically MAKING A LOT OF MONEY ON THE TRANSACTION separate and distinct from this trash fee (warehousing fee).  Depending upon the type of participant -- broker, mortgage lender with captive warehousing and corresponding institution, or full mortgage banker -- the amount of of revenue on the transaction will probably be at least 1.00% to 4.5% of the loan amount and possibly even MORE.

So your rescission DENIES the lender this revenue and STICKS the lender with ALL of the fees.  You walk away whole and find another HONEST lender.  If I were a lender and faced with a borrower threatening to rescend, I would FORGET ABOUT the fee.  But IF there is still time, you need the lender and title agent to recognize in writing that this fee is NOT to be imposed WITHIN the rescission period.  They will try to talk you across the deadline and then you have missed the opportunity.

Search Google using keywords such as "RESPA", "Regulation Z", "rescission", and/or "Truth-in-Lending", etc.  For more information on this topic.

I would be interested in hearing Moose's further insight on this topic.      
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    With all due respect, while you are swatting at the knat that got into the
tent, you might want to look for the "camel" that came in with it. I'm talking
about the "yield spread premium" that you most likely "paid outside closing"
or "POC" to the broker for selling you a higher interest rate than you could
have had.
    Look at all the closing documents and see if you can find "POC". If this
was not revealed before you closed on the loan, you might be able to sue
them for this amount as being a breach of the original brokerage contract
you signed. The other alternative is to get the whole transaction reversed
but that may be too late if you already spent the money received.
    "Yield Spread Premium" is the extra commission the broker receives from
the lender for selling you a higher interest rate than you could have had.
If you didn't agree to it, you have a cause of action against the broker.
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Knows About RESPA

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With all due respect, while you are swatting at the knat that got into the tent, you might want to look for the "camel" that came in with it.


Well said, Mike!  You are really DEAD ON!

In most transactions, the consumer is given such a haircut on the interest rate and the points, that the trash fees are really NOT the primary issue upon which the consumer should be primarily focused.

Since the question posed was about the $175, my reply focused on this question.  But Mike is exactly RIGHT that you ought to be looking at ALL of the economics of the bargain.  This sort of bait and switch is usually just the tip of the iceberg! 

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A Question...
This subject interested me enough to go back into my own closing docs, and have a look see.

Sure as a pig's gotta a snout, they threw in a Revised HUD-1 that needed my signature on, and also had a fed-x envelope to rush it back to them.

Guess what?

I didn't sign it, nor did I send it back to them.

The letter attached to it stated that I must sign it, or they couldn't close the file.

This was two years ago, yet they sold my loan off within about a week to a different lender, and they have since shut their doors.

I didn't notice this until I read this thread.

How can they sell something that is incomplete?





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Knows About RESPA
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How can they sell something that is incomplete?


They probably forged your signature to the revised HUD-1 Settlement Statement!

It does NOT require a notarization and unless you obtained it through a request for production during discovery at a foreclosure, you would NEVER ever see it again.  NOR is the HUD-1 settlement statement typically important to proving THEIR CASE in a foreclosure.  It might be a means for YOU to show some mischief.

So someone signs your name and completes the file.  Ships it off to the mortgage investor and no one is the wiser!

ROUTINE!
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A Question
I'm not in foreclosure, yet.

I am gathering important info for the near future.

They will NOT take my home easily.

I WILL stand and fight this one tooth and nail.

I'm waiting by my mailbox for a change in my servicer.

Hear me Jr., (Litton)

I KNOW my fate.

Do they know me?

I AM READY.




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