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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Misapplication Payment

State can do little to help with loan-service woes

New Hampshire Sunday News Staff

Last year, 35 homeowners filed complaints about their mortgage servicers with the state Banking Department, more than twice the number filed in 2006, according to Banking Commissioner Peter Hildreth. Most of the complaints alleged misapplication of payments or charges.

But the reality is that his department cannot help many New Hampshire consumers with such problems, Hildreth acknowledged.

That's because federal laws and recent court decisions have exempted national banks and their operating subsidiaries from state regulation, he explained. "Under those decisions, the states cannot do anything that interferes with the business of banking -- and they interpret the business of banking very broadly," he said.

Given the ongoing mortgage crisis, Hildreth contends Congress should change those laws. "I think that states are better able to help consumers with issues like this," he said. "It's that simple."

The state banking department currently licenses 39 mortgage servicers. National banks are regulated by federal agencies, including the Office of the Comptroller of the Currency, the Department of Housing and Urban Development, and the Federal Trade Commission.

Of the 35 consumer complaints about servicing filed with the Banking Department last year, 12 are still unresolved. Five were resolved in favor of the consumers, who received restitution; the companies were found to be within their rights in 11 cases; and seven were referred elsewhere because the state had no jurisdiction, Hildreth said.

Last year, Hildreth ordered all mortgage companies regulated by the state, including servicers, to appoint someone to work with consumers who have problem loans. "But if it's a national bank or an operating subsidiary," he warned, "you're pretty much on your own."

There's another problem for homeowners here. Like other entities regulated by the state Banking Department, mortgage companies are exempt from the Consumer Protection Act. And attorneys say that makes it difficult for consumers to sue mortgage servicers if they feel they've been unfairly treated.

Walter Maroney is the former chief of consumer protection at the Attorney General's Office; he's now in private practice in Manchester. He believes mortgage companies should be brought back under consumer protection laws here, in light of the current mortgage crisis.

"One entire avenue of well-established relief that exists for people in virtually every other state in the union has been cut off here," Maroney said. "And that's bad public policy."

Manchester attorney Edward O'Brien said he gets on average one call a week from consumers having trouble with mortgage servicers. Most complain about payments that haven't been credited on time, force-placed insurance, and what he called "fictitious fees."

But in most cases, O'Brien said, "I tell them I can't help them at all because of the state of the law up here."

"The problem in New Hampshire is that all the entities that are typically the entities that abuse consumers ... have gotten themselves exempted from the Consumer Protection Act," O'Brien said.

"Unless you've gotten a bad haircut or the birthday cake you bought flopped, you can't use the Consumer Protection Act."

These attorneys say the Legislature should take another look at that exemption. Losing your house to foreclosure is "the biggest and most traumatizing and damaging thing that, short of the death of a loved one, can happen to someone," Maroney said.

"It's a huge, huge financial disaster which sets people back for years and years," he said. "And if people go into bankruptcy to try to avoid this, they end up with a credit rating that's now in the seventh circle of hell."

Katherine Porter, a University of Iowa associate professor of law who has investigated the mortgage servicing industry, noted government entities trying to address the mortgage crisis have focused almost entirely on predatory lending.

"Congress and other regulators have been slow to recognize the servicing piece to the story," she said. "But you can have a perfectly fine loan that was originated fairly, and then you can have abusive servicing that can drive you into foreclosure."

In a research paper last November, Porter warned "mistakes or misbehavior by mortgage servicers undermine America's homeownership policies for all families trying to buy a home."

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Union Leader - State can do little to help with loan-service woes - Sunday, Feb. 17, 2008

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Oh, so there is no consumer protection law.  Okay I get it now.

That is why it seems it is legal to commit fraud against a borrower.

How about filing fraud charges?  It is fraud to charge people money
for services not rendered or for fees that are unearned.

Everytime they send a phoney based letter to a borrower, threatening
foreclosure when the borrower is actually current on their mortgage
seems like attempted theft until they actually take the property from
the borrower.  Then it seems it should be called what it is.  Theft.

Prosecute them criminally as they should be and watch them pay to avoid
going to prison but only if it is a very long time and they of course would
have to forfeit their assets to be sold and the proceeds to go back to
borrowers that have been fleeced.

The perps should be flogged in a public place by a different borrower every week. 

Then the next day, attorneys doing their foreclosure crap with forged documents or is it more politically correct to say "recreated documents"
or as we say commit fraud upon the courts be given a good beating as well.

Hell, they still own their houses and large buildings.  Disgorge them.

Just sign me Cranky in NY


Quote 0 0 - Attorney General Cracks Down On Mortgage Fraud

Chris Holbert, president of the Colorado Mortgage Lenders Association, said he welcomes the legal action.

"We think when people, whether they are in the industry or outside, violate the law, law enforcement should go after those people and those entities fairly aggressively," Holbert said.

If found guilty, the mortgage company would face $2,000 to $10,000 fines for each violation.
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I defended my foreclosure with various counter claims against the servicer/bank.

Fraud was one of them, breach of contract another

No, we little americans and the Governors can not bring certain actions against national banks and their protected subsidiaries and force them to treat homeowners fairly

BUT if they want to drag US unto court we can defend ourselves against foreclosure and prevail on our counter claims. State exemption does not flat out bar these claims across the board.
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Who get's the 10,000.00 for each violation and for what kind of violations? What do they get for stealing homes?

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Hey Mike, You sure do a good job of keeping in the news  You get in the news more then anyone I know. Keep up the GREAT WORK!
Fighting mortgage disservice 
The Union Leader, NH - Feb 16, 2008
... same basic pattern of facts, and that pattern of facts doesn't happen just by accident, that often, and that commonly,"  said attorney Walter Maroney. ...
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