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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Nye Lavalle

The Scars of Losing a Home

Published: May 18, 2008

ACROSS the United States, there were 243,353 foreclosure filings in April alone, nearly three times the total in the same month just two years ago, according to RealtyTrac, a company that follows the numbers. The trend is unmistakable, and suggests that, without government intervention, many millions of American families will be losing their homes before long.

What would this mean in human terms? Picture a line of moving trucks extending for hundreds of miles: they are taking the furniture of countless families to storage lockers. Picture schoolchildren saying goodbye to their classmates. They aren’t going on vacation: they are being abruptly moved to the other side of town.

It’s easy to take a stern view of this spectacle. The arguments go something like this: Foreclosure is not the end of the world. There are valuable lessons to be learned from such a life experience. After all, we live in a capitalist economy that thrives on the sanctity of contracts. The founders of our nation put the contract clause into the Constitution to make it clear that people need to live up to the documents they sign.

This stern view may, in fact, be winning the battle of public opinion. On May 9, the House approved legislation aimed at helping some of the people facing foreclosure, but the president has said he would veto it.

This legislation, sponsored in the House by Representative Barney Frank, Democrat of Massachusetts, and in the Senate by Christopher J. Dodd, Democrat of Connecticut, is the only substantial proposed fix for the foreclosure mess that has gone anywhere. It would guarantee up to $300 billion in mortgages of troubled owner-occupants. But, right now, the bill’s prospects are bleak, and the troubled homeowners may be left with virtually no help at all.

Now, let’s take the other perspective — and examine some arguments against the stern view. They have to do with the psychological effects of strict enforcement of a mortgage contract, and economists and people in business may need to be reminded of them. After all, too much attention to abstract economic statistics just might make us overlook what is really important.

First, we have to consider that we cannot squarely place the blame for the current mortgage mess on the homeowner. It seems to be shared among mortgage brokers, mortgage originators, appraisers, regulatory agencies, securities ratings agencies, the chairman of the Federal Reserve and the president of the United States (who did not issue any warnings, but instead has consistently extolled the virtues of homeownership).

Because homeowners facing foreclosure must bear the brunt of the pain, they naturally feel indignation when all of these other parties continue to lead comfortable, even affluent lives. Trying to enforce mortgage contracts may thus have a perverse effect: instead of teaching homeowners that they should respect the contracts they sign, it may incline them to take a cynical view of the whole mess.

But instead of having sympathy for these homeowners, many people blame them for their predicaments. That isn’t surprising. It’s an example of a general tendency that was documented by social psychologists decades ago.

In his 1980 book, “The Belief in a Just World: A Fundamental Delusion,” Melvin Lerner, a social psychologist, argued that people want to believe in the inherent justice of the economic system in which they live, and want to believe that people who appear to be suffering are in fact responsible for their own situations. He provided empirical evidence, derived from experiments, that after an initial pang of sympathy, people tend to develop negative views toward others who are suffering. That negative tendency seems to be at work today.

Second, it is important to consider the psychological trauma of foreclosure. No one is likely to starve or sleep on the streets as an immediate result of a foreclosure, and the authorities no longer dump a family’s furniture on the sidewalk when it happens. Nonetheless, there is deep trauma.

Homeownership is fundamental part of a sense of belonging to a country. The psychologist William James wrote in 1890 that “a man’s Self is the sum total of all that he CAN call his, not only his body and his psychic powers, but his clothes and his house, his wife and children, his ancestors and friends, his reputation and works, his lands and horses, and yacht and bank account.”

Homeownership is thus an extension of self; if one owns a part of a country, one tends to feel at one with that country. Policy makers around the world have long known that, and hence have supported the growth of homeownership.

MAYBE that’s why President Bush’s “Ownership Society” theme had such resonance in his 2004 re-election campaign. People instinctively understand that homeownership conveys good feelings about belonging in our society, and that such feelings matter enormously, not only to our economic success but also to the pleasure we can take in it.

But we are now seeing the president’s Ownership Society plan operate in reverse. Already, the homeownership rate has fallen — from 69.1 percent in the first quarter of 2005 to 67.8 percent in the first quarter of 2008. That’s almost back to the 67.5 percent level where it stood when Mr. Bush took office in 2001. And it is likely to fall further.

The pain of this reverse movement could leave a psychological scar that will be with all of us for the rest of our lives.

Robert J. Shiller is professor of economics and finance at Yale and chief economist of MacroMarkets LLC.
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Bush is clueless. He's living in the world Phil Gramm helped create and Phil Gramm is set to be treasury secretary in a McCain administration. If you like how this has turned out just keep putting the same people in congress.

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have been fighting  The Money
Store/ Fairbanks Capital/ HomeQ Servicing/  since January 2000.  i sent them a QWR Letter, in 2006. it was ignored.
I  had to have hip replacement
And Filed a chapter 7 to  Reduce my debts. 
 I was only working part time as an auditor and  was
Home Bound, learning To be self sufficient.  And receiving Disability.
 I reaffirmed my home loan.(1999) 
    According to the National Consumer Law Center. "Surviving Debt"
Book, I Had special Rights created since  
I had a non purchase money loan. The home
Improvement Contractor had to be 
Sued for shoddy workmanship, and The Money Store paid them off any way,
(more special rights 
Created according the NCLC, for a "non-purchase money loan"
I went to legal aid and was paid partially the money I spent on the
Getting The roof repaired. 
  I contacted  (NCLC) for their help and  
They don't help consumers directly, only attorney and "advocates". 
That would be you.
    The second time I filed bankruptcy to save my home, it was because
Fairbanks Capital had  Tried to enforce my arrearage fees.
 And  that was  created by The Money Store, dragging their 
Feet .  
The Bankruptcy judge told Fairbanks ,
They had gotten a "pig in A Poke", because  they 
Knew I was in default and fighting it, and  their assignment
Was a "pig In a Poke".
And they Were not "holder in due course". 
          An assignee only attains  holder-in-due-course Status   
                     Thus avoids defenses the consumer raises (1) if
It Assigned   A negotiable instrument and meets the 
Holder-in-due-course   Requirements of Article 3 of the UCC. 
    Legal aid, while not willing to represent me, because I was in a
Chapter 13. Told me, that if  
Fairbanks was not "holder -in-due-course" one was. Despite
Homeq Servicing notifying  
Me, over 20 days later, that they were the new servicers of my loan. 
I raised this legal issue in my adversarial complaint to no avail.
    I contacted NACA the same year. Homeq servicing was unresponsive. In
Fact, they were  
  Unresponsive to any and every agency that contacted them on 
 My Behalf. 
    Then the Housing 
Information Office contacted them and United Services(2004).  I was
Allowed To enter into an loan Modification agreement in the spring of 2003,
(587.000 they accepted the money given them 
To bring  me current and to start my payments of $329. Or so. 
    I sent them a deposit slip. And a check for the first "new payment"
Arrangement.  They sent It back to me. Despite accepting the monies
From the agencies. Saying That I   Was in  Bankruptcy and they could
not accept it. I was not , it had been
Discharged.  They kept the
Agency's money. And claimed there "was no loan modification signed and
    In September 2003, a loss mitigation agent contacted me and said
Well  When do you 
Want your new payment schedule to start? 
 I said, December, because I
Was Told, fees had  
To be paid again.  And I knew I had to get them from somewhere. 
  In October and November
I was contacted and a gentleman asked me how much did I want to sell my
Home For? 
    I told him it was not for sale. He then advised me, that it was
Being Advertised to be
Auctioned on Jan. 9, 2004.  I , pro-se filed a Chapter 13. To stop the
Sale.  Every time 
Homeq has been unreasonable  and uncooperative,
I filed bankruptcy. I
Had no Choice. Or lose my home. 
I have been diligent  in timelines and filings.  I filed an adversary
Complaint while paying  
To the trustee each month.  I contacted 29 attorney's.
  I even filed a Motion with the judge. 
That, because I was indigent, an attorney could be appointed by him.
This Too was ignored. 
    And rejected. 
    You have 'Power". Please--help me. The attorney's who would not or
Could Not help Me, said, Missouri does not have any "anti-predatory lending laws".
They Imparted some Legal gems and sent me with "god speed".
They definitely if they had any  Opinion at all said, 
TRUTH IN LENDING VIOLATIONS, have occurred in my case. (accepting late
Pymts In the past)  
    Legal aid was allocated monies to help fight predatory lending here
In Missouri. (2003)  
First they told me, I was in a chapter 13. They could not help me.
 They only Help and  Do chapter 7.  
Two years later, I contacted them and
They told me, I was in The wrong  Zip code.
They only helped people in certain Zip Codes.   Then when I
Contacted them This year. 2008.  I was told,
There were not enough attorney's to help
everyone  and Not enough funds. 
    However, I  was entitled to homestead exemption. Of $15,000.00.   My
loan is only $34, 085. But with all  the excess and bogus fees,
 they have added, it
Tops $73,000  
And this took away the exemption.
Which would have made me only owe
$15,000  Or so on the loan. 
 I , fought this case through the Bankruptcy
Appellant Court, to The U.S. APPEALS  COURT.  
 According to them no laws have been broken 
              (all constituent services contact numbers)
    And yes, I contacted my State Senators (Clair McCaskill,
Emmanual Cleaver(816-842-4545),  Yvonne Wilson ((573-751-9758)
  State Representatives--Yvonne Wilson, and Govenor Matt Blunt
Govenor Chris Bond (573-634-24850) and
HUD in 2003, and the Federal  
Trade Commission. In (2003).
Laws have changed since then.
The Govenor said it was not a Federal Issue.
My state rep and senators,
They are fighting and have  introduced bills. 
Please help me. What am I doing wrong?
Who can stop me from being
I , am aware through my research , that  I  have a better leg to fight
if I am still in 
The house, than if I am evicted or have non possession. I also contacted
HOPE NOW. They said, they could not help me.  
  I have been fighting Eight years. Spent countless dollars filing
and getting the transcripts, getting sicker by the day.
I am handicapped and disabled from COPD -ASTHMA, and TYPE II DIABETES.
    Awaiting your response
Virginia Dale
7932 Park Ave
Kansas City, Mo. 64132-2319

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The NCRC offers foreclosure prevention services and about 3 years ago helped a woman from this board refinance into a safe loan. There was a story about it in USAToday.

Here are some links:

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Yesterday 5/18/08 was my last day per eviction on the home I bought in 1984 but lived in since birth (1959).

I remember working 7 a.m. till 11 p.m. nearly 7 days per week,  when we decided to renovate the 1830's structure.  I remember raising my children there who are now 18 and 22.  I remember how proud I was of my accomplishments in the restoration of the Massachusetts Historical Society listed property.  I remember after the restoration was completed and the landscaping began......I remember wedding parties stopping to have  their picture taken in front of the house because of the beauty that the landscaping provided for all, and finally I remember going to a non profit home save program where the individual tried to help the people losing their homes by saying "don't ever cry over something that won't cry over you"  Lastly I remember weeping and feeling like someone had died when I left yesterday.

The tears will not stop, but I know that God will not close one door without opening another, and I must have faith that it is for a reason that this Fraud took place on myself and family.

We are legally out of our home but I will continue to visit this website, I will continue to help as much as possible, the many people around me that are in the process of losing their homes, and help them as much as I can with the tools that have been learned here.

Thank you all for the information emails and support during this long difficult journey.

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Thoughts and prayers.

June 7 will be our one year aniversary of our eviction.  We're closer as a family and we are fighting hard. 

Keep after them.

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O -
Dang Bob it does not seem like it's been a year already. I hope things are going well.

Best of Luck to all of us.
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I remember the last day in our home.

After I swept the floors one last time, and checked the closets for family belongings...

I ran my hands down EACH and EVERY wall of my home to say, "Goodbye".

Memories CANNOT be taken from ANY of us.

The pain never goes away.  It can be redirected.

I use mine in a positive way.

Tell others what you are feeling. 

NEVER keep those feelings bottled up.  This could be a very dangerous place to be.

Know that we are a very supportive group here at MSF.

Reach out, and you will never be alone.

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Sorry to hear about that Rick. What a Drag!

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4 justice now

I spent four years, mostly evenings, weekends, holidays and all my vacation days restoring my home and its yard back to its original 1920s glory. Most of the work I did on my own, mostly because I couldn't really afford a contractor to do that much work, but also because I simply enjoyed the reward of doing it myself.

Unfortunately, my home's growing equity and street appeal made it just too valuable of a target for the Mortgage Servicing Thieves to pass up. They bought the servicing rights to my loan and just three months later I was forced to sell the home that I had planned to stay in and enjoy the remainder of my life. I had no doubt, just as many others before and after me that if I had hesitated at all the thieves would have gotten it all.

They didn't get my house, but neither did I. They cost me over $250K but that number keeps growing due to the damage that they intentionally inflicted on my credit. Please know that you're not alone at all. And also be aware that no matter what, some will actually attempt to blame you just for being a victim. After all, it's so very much easier for them to blame us than it is for them to acknowledge that they themselves could be just as vulnerable, and that their own country has become so totally corrupt and inhumane.

I'm so very sorry about your loss, and that of the many other good people here. If I can help in anyway please just say the word. We must all stay united in this fight, this war until justice is found no matter what it takes, either it be in or out of the courts.



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Miss Molly
I have a couple of years on you. 3.5 years post losing the family home & every day- it still affects me.

It affects me in many ways. The scars are deep.

We have tried very hard to recover. Our rent is paid early, our bills never late--- we have worked hard to try to repair our credit. The damage done to us by our Superior Bank/ EMC loan, is unsurmountable. Even though we paid ALL their demands=We still can't get credit & it also has affected employment (they do "background checks" which really means they check your credit), it has kept us from being able to rent a decent place, & it has forced us to pay extremely high insurance rates. We are forced to "contribute" nearly 30% in payroll taxes, because we have no interest to write off.

At first it was almost a relief. No more headachs- no more unreasonable demands. The wound scabs over, but there is infection that grows down deep. AS time goes on it begins to fester. 

It affects your relationships, as reality that your future is severly affected starts to sink in. If you are lucky enough to have a partner that communicates well, you might get through it.  
Many times it's almost easier NOT to work it out. Sometimes it's just easier to start all over with somebody who might get you to a "secure" point in your life again. Sometimes it's not even a choice, but a natural progression to search & find security.

The embarrasment of such happening fractures friendships, sometimes by your choice (those jerks- they just don't understand) or their choice of just classifying you as a loser. You lose respect of others when they learn that you have "lost" your home. Or worse yet- you lose respect for yourself as a good provider to your family.

Even your relationship with kids & family members change. They hear your words of defense, but they don't believe it. Trust disappears. walls build up & you are left feeling lost, helpless & worthless.

With time- it get's a bit better,

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Yes there was a member of this board who was able to refinance away from Centex. here is the link to a followup story from USA Today which mentions my dear friends past situation along with others.

Take the time to read the whole article, just more proof of what we each have gone through or are about to.

Excerpt:  Vulnerable victims

Borrowers can also get into trouble when they are forced to take out loans at stressful points in their lives — a bout of unemployment or an expensive illness that erodes their credit score, even as it increases their need for cash.

Priscilla White, 54, of Peabody, Mass., refinanced her 7% mortgage in 2002 to pay off $20,000 in debt tangled up in divorce proceedings. Her divorce attorney referred her to a mortgage broker, who offered to set her up with financing at a 6% interest rate. At closing, she discovered the rate was 11.25% but signed out of fear she'd be in legal trouble if the debts weren't paid.

Six months later, White tried to refinance, only to discover the initial appraisal inflated the value of her house. Her income had been overstated in loan documents, with monthly payments exceeding her net income. Unable to get an equivalent mortgage, White, a secretary in a large law firm, started investigating. She settled out of court with the company and refinanced through NCRC with a 30-year mortgage at 7%.

"He was my divorce attorney. I thought he was going to be good for me," White says. "The documents were immense and a lot of the (fraudulent) stuff they put in the back. ... By the time you got to the good stuff, you were exhausted."

Robert Armbruster, president of the National Association of Mortgage Brokers, says while most mortgage brokers are ethical, some engage in unscrupulous lending. "There are probably some bad apples out there. There are bad apples everywhere," he says.

Armbruster would like to see a national registry of mortgage brokers and wants Congress to give states seed money to prosecute bad brokers.

The Center for Responsible Lending estimated in a 2001 study that predatory loans cost consumers at least $9.1 billion a year. Lenders call those figures grossly inflated.

There are no comprehensive data on predatory lending, but there are clear signs it has been a problem:

• Household International, now HSBC, in 2002 agreed to change its practices and pay up to $484 million in consumer restitution for alleged predatory-lending practices in the subprime market. Household now funds the NCRC rescue fund.

• Citigroup in 2002 agreed to pay $240 million to resolve abusive-lending charges against its subprime subsidiaries, which the Federal Trade Commission says lured borrowers into high-cost loans through false statements.

• First Alliance Mortgage in 2002 agreed to a $60 million settlement with the FTC and six states.

"When the market expanded rapidly, there were excesses, and excesses created problems," says Mitch Feinstein of the National Home Equity Mortgage Association, a trade group for non-prime lenders. "We believe the market has responded very favorably by companies imposing much higher standards and fraud-reduction efforts."

Still, the legal cases continue churning.

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That's how they got me! 

When I had to take out an equity home loan in a hurry to stop the nursing home from taking our home due to $35,000 worth of fraudulent bills. 

Of course, they gave me the worse loan, an undisclosed all interest sub prime loan with undisclosed balloon payment.

This was before congress and the states starting cracking down on nursing homes for abusive practices against the elderly.

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4 justice now
And the cover-up continues!

Robert Armbruster, president of the National Association of Mortgage Brokers, says while most mortgage brokers are ethical, some engage in unscrupulous lending. "There are probably some bad apples out there. There are bad apples everywhere," he says.



If he was interested in being truthful he would have said: While very few mortgage brokers are ethical, most engage in unscrupulous lending.





Mitch Feinstein of the National Home Equity Mortgage Association, a trade group for non-prime lenders. "We believe the market has responded very favorably by companies imposing much higher standards and fraud-reduction efforts."



What a crock. If they were at all interested in reducing fraud they (non-prime lenders) would all be in prison by now.

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Thanks to all for your support and kind words of encouragement regarding the loss of our home....The Psychological Scars of Losing a Home will be with me until death.

I lost a Business along with the home (grandfathered) for those of you familiar with the term, just means my family was there so long I could run a small business there which I did for nearly 30 years....

Now I have to work for a fraction of what I use to make, but thanks to this God Given Forum, regardless of what I read about the difficulties of a successful financial rebound I must believe that continued visitations (learn, learn, and learn) to MSfraud will ultimately assist me and also then help me to assist others.

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