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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In a non-judicial state, house already foreclosed on and Trustee is under investigation.  Sending to AG questionable paperwork.  Today is the first time that I compared the charges and that left me with questions.  There were 2 auction dates because of a BK stay.  I am rounding the numbers off to full numbers so the totals will be off.

AMOUNT DUE TO REINSTATE                    1st date                  2nd date

Monthly payments                                   13,447                   39,864
Late Charges                                              561                     1,569
Lender's Fee & Costs                                     42                     2,698

                  Total Arrearage                    14,049                    44,129

Trustee's Expenses (Itemized)

Trustee's fees                                           675                         476
Title Report                                            1,056                           0
Statutory Mailings                                       23                           49
Recording Costs                                          32                         260
Postings                                                    58                           70
Sale Costs                                                 0                           500

                   Total Costs                         1,843                      1,355

                   TOTAL AMOUNT DUE:          15,892                     45,484

The monthly payments increased dramatically because the servicer paid the property taxes and therefore increasing the payments by almost double.  Notice the increase in Lender's fees.  Why are Trustee's fee more in 1st auction date?  How can there be a Title Report charge in the 1st auction notice and none in the 2nd notice?  How can the Recording costs be so much in the 2nd action date?  Why no Sale Costs in the 1st auction date?  Is this normal or are some of these charges outrageous?  Am I making too much of this?  All thoughts are welcome.
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Stephen

Classic loading up of foreclosure with garbage charges.  Common sense tells you they're trumped up.  I know it, because it's standard practice in the industry to pounce on the downtrodden with every fee you can imagine, tripled.

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William A. Roper, Jr.
Kayko:

First, you are correct to be carefully scrutinizing every document and it is useful to have a strong skepticism for each charge.  Stephen's view that mortgage servicers and foreclosure mill attorneys cannot be trusted to apply various charges, costs and fees fairly or accurately is certainly well founded.

Even if the foreclosure mill were not padding the charges, which would seem to be common, mistakes can occur.  And you can be assured that virtually every mistake made by a servicer and/or foreclosure mill law firm as to charges will be a mistake made in their favor.

This being said, I cannot see anything that is particularly glaring which I could confidently state is an irregularity.  I should add the covenant that I am TOTALLY UNFAMILIAR with the costs and charges commonly applied in your jurisdiction, so I am applying more of an informed common sense yardstick than any sort of expert assessment or opinion.

Whether the monthly payment or late charge assessments are correct ought to be something that you should be able to readily ascertain from the contractual terms of the promissory note, past billings and statements and canceled checks.

While the Lender's Fees and costs for the second date looks rather excessive at first glance, and particularly in comparison to the first date, it seems likely that some or all of these Lender's Fees are likely to be charges related to retaining a law firm to obtain a relief of stay from the bankruptcy or to otherwise advise the Lender in consideration of the bankruptcy.  I am NOT saying that these or reasonable or usual.  But I expect that many courts would be sympathetic to the imposition of charges to cover legal charges of the creditor arising out of bankruptcy where the negotiable instrument made such a provision and the fees were permitted or permissible under the bankruptcy rules.

The failure to itemize and distinguish these charges is almost certainly deliberate.  And it is very possible that some or all of these fees might turn out to be impermissible.  But you would have to obtain a more detailed accounting of these charges and consult with a bankruptcy lawyer, which is going to probably be uneconomic given the cost and the likelihood of success.

The Trustees Fees are shown to be LESS for the second auction.  It would seem that there is some basic charge that the trustee imposes and an incremental charge when the auction is required to be rescheduled.  The additional fees for the second auction due not appear to me to be grossly unusual, but as I said before this is a lay opinion without reference to ordinary and customary charges in your area.

I do not find the amount of the Title Report or its application to the 1st auction but not the 2nd to be unusual.  Title examination charges are assessed and applied in different ways from state to state and sometimes differ in various places within a state as a matter of practice.  This may also somewhat change over time.

When I was lending in Massachusetts over two decades ago, as I recall we charged (at origination) for a title search, a title examination, and for title insurance.  The title search was done by paralegals at the courthouse.  It was reasonably inexpensive, about $125 as I recall.  The title examination was done by an attorney and included an attorneys opinion of title.  It was fairly costly, then about $750, as I recall.  The Lenders Title Insurance policy was based upon the loan amount but was quite inexpensive compared to other states.  That was two decades ago.

In other places, the title examination or report is prepared from a Title Abstract rather than a regular courthouse search.  The cost of a search or abstract may be bundled with the report.  The examination may in some cases be by the title insurer and bundled in the cost of the policy.

The mechanics of the title search and examination can involve ascertaining the ownership of the property back to the original grant or at least back to some statutory period beyond which ownership cannot be disputed.

Once the report is done, it wouldn't really have to be redone for a second auction, though even AFTER the title examination, we used to also pay for and charge our customers for a so-called "run down and review" to verify that there had been no new liens or conveyances between the date of the title search and the date of RECORDING of the instruments.  (Again, this is for a sale or refinancing.)

So while I cannot render any sort of expert opinion as to the validity or correctness of these amounts, they seem to me to be roughly the right order of magnitude and the distribution across two auction dates appears to me to be reasonable based upon my understanding of what is likely to be involved.

It is not clear to me why the statutory mailing and posting costs are elevated for the second auction.  If you were in receivorship at the time and mailings had to be addressed to additional persons, such as a Chapter 13 Trustee or U.S. Trustee, or to other creditors, this could help explain the postage costs.  Posting costs might have involved advertising rates or some charges for posting notices at the court house.  These might have changed or involved a per page charge that increased due to some page flow issues.  These charges are sufficiently minor that it is hardly economic to pursue them.  (Of course, that is how these mills clip everyone for another $10 here or there to buy the caviar for their yachts!)

The increase in the recording costs would seem likely to reflect that fact that the first auction involved only the recording of perhaps a forged assignment and an appointment of substitute trustee, which probably wouldn't have recurred for the second auction.  Recording after the second and successful auction would have involved recording of other documents, including the trustee's deed.  It is unclear to me what other documents might be recorded in your jurisdiction in support of the judicial sale.  I suppose that they might have recorded the court order granting a relief of stay of some other documents.  You ought to be able to check the records at the courthouse.  Very likely, many or all of these documents may have been recorded together and might have sequential document numbers.  Recording charges are usually assessed PER PAGE.  You ought to be able to count the pages.

The "Sale Costs" probably reflect the Trustee's appearance on the Court House steps or at another valid auction location set forth in the notice and actually conducting the sale.  Of course, the alleged mortgage investor will have sold this to themselves.  Multiple auctions probably took place the same day at the same location.

A $500 charge would not be altogether unreasonable if an attorney had to drive to the courthouse conduct the auction, return to his office and complete the paperwork for your loan alone.  The travel time from a suburban location could readily eat up a good portion of that amount.  Given that he is often making a single trip to complete dozens of auctions, will spend only a minute or two on YOUR auction, for whcih no one else shows up and bids, and relegates the completion of the paperwork to paralegals who are using pre-printed forms, the amounts are really pretty outrageous.  But you are unlikely to succeed in finding a credible expert witness to say so and the court is going to be sympathetic to paying an attorney such a fee.  Bear in mind that courts are accustomed to seeing attorneys fees one or two orders of magnitude higher in other litigated cases.  And the judge can also probably count on a round of golf with the recipient if ever the matter is contested.

On balance, I do not find these charges egregiously out of a range as to what common sense might suggest.  In a non-judicial foreclosure setting, where discovery is not readily available, it is difficult to press for receipts or details which could clarify the vague assessments.  For the amounts possibly in dispute, it seems that you will be unlikely to find an attorney who could bring a suit on your behalf to correct or recover any disputed differences, even if you had proof of the irregularity.  But to the extent that you believe that the charges are inflated or incorrect, I would encourage you to discuss this with an attorney, hopefully as an initial preliminary consultation for which you will not be charged.

I would note that I have seen a number of cases where the sleaziest of the sub-prime servicers have padded mortgage accounts with a variety of dubious charges.  They will add hundred or thousands of dollars in Lenders Fees or Attorneys Charges with far less detail than is shown above.

The "Lenders' Fees and Costs" seems reminiscent of this.  Whether the amount shown can be justified in consideration of attorneys' fees from the bankruptcy is unclear to me.  But that is the sole charge that appears to me to be the most questionable.

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