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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Does an attorney have any knowledge of Veriquest Financial...our mortgage was 'sold' to veriquest Dec. 1, 2012...We were current on our loan with SPS.

Veriquest sends us a notice of default on Dec. 17, 2012. Shocked...threatened foreclosure in the letter.

In my research, they recently sent multiple swat teams to evict a Colorado homeowner.

We have no proof of servicing rights or ownership of the debt...they won't submit it because they don't hav it. They told us over the phone Loan Star 'owns it'.

Anyone?
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Anthony
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Does an attorney have any knowledge of Veriquest Financial...our mortgage was 'sold' to veriquest Dec. 1, 2012...We were current on our loan with SPS.

Veriquest sends us a notice of default on Dec. 17, 2012. Shocked...threatened foreclosure in the letter.

In my research, they recently sent multiple swat teams to evict a Colorado homeowner.

We have no proof of servicing rights or ownership of the debt...they won't submit it because they don't hav it. They told us over the phone Loan Star 'owns it'.

Anyone?


Your post makes no sense whatsoever and is contrary to almost any description of routine industry practices.

As a preliminary matter, we can certainly agree that SPS is a predatory servicer which has long engaged in fraudulent servicing practices. It is not a matter of any great dispute or doubt that SPS will engage in dishonest and harmful behavior. SPS is the successor to Fairbanks, a very corrupt enterprise that entered into a settlement in Massachusetts in the Curry class action case several years ago. Fairbanks then changed its name to Select Portfolio Servicing and continued to engage in misconduct albeit in a some what less flagrant and somewhat more muted way.

So it is not the identity of the entity that raises doubts about the completeness or veracity of your account.

Rather, it is the simple assertion that "We were current on our loan with SPS."

The mechanisms used by servicers engaged in fraudulent servicing are many. They typically create a pretext to charge excessive or unjustified fees. They delay applying payments and then soak you with unjustified late charges. They assert that you have failed to keep the property properly insured and then put an overpriced "forced placed insurance" policy on your property and add the inflated premiums to your monthly payments precipitating a default.

Once the servicer has created the pretext for a default, then the servicer adds a variety of other default related fees and charges, purportedly a default fee, attorneys' fees, etc.

Though these scams are many and varied, usually the distressed borrower is well AWARE of an allegation of default arising from these various disputed junk fees. The assertion of default comes as no great surprise to the borrower, because the servicer has been carefully crafting an alternative accounting of the loan based upon the fraudulent fees for some time.

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The assertion that the servicing rights for this loan have been recently sold is also not altogether unusual or alarming EXCEPT that such sale of servicing rights rarely take place as you have described the activity.

One kind of sale of servicing rights is the bulk sale of servicing. When a bulk sale is taking place, the servicing rights are usually being sold by a servicer with higher costs or better ethics to a servicer with lower costs or worser ethics. The mortgage investor is entitled to payment of the monthly interest and principal. The servicer receives what is termed a servicing spread, an amount usually about 0.5% of the declining balance of the loan annually for the responsibility of servicing the loan for the investor.

If all loan servicing was honest, it would make sense for the servicing rights to be gradually acquired and consolidated into those entities that are most efficient at loan servicing activities - those with the lowest costs. These low cost firms would produce the greatest profits from the fixed revenue associated with the servicing spread.

But through the fine print in the servicing contract and by engaging in fraudulent practices, dishonest servicers have been able to wring additional profits from each loan under servicing. The servicer is usually entitled to keep any late fees, without passing these on to the mortgage investor, so by simply holding a payment and assessing a late fee on the assertion that the borrower has paid late, the dishonest servicer can increase its revenue. Similarly, profits from forced placed insurance and a myriad of other trash fees are retained by the servicer.

This creates a rather interesting distortion in incentives. Since those firms engaged in fraudulent servicing practices can extract more revenue and more profits from each serviced loan, over time the servicing rights become increasingly concentrated in those firms with the worst criminal servicing practices, because these firms wil PAY MORE for the servicing than an honest firm. The honest servicer CANNOT AFFORD to bid the same amount for servicing rights that would be paid by a criminal enterprise, because the honest firm would not engage in the various fraudulent activity that is used by the dishonest firms to enhance revenue.

Thus, the industry is governed by a paradox that over time ALL servicing tends to accumulate in the most dishonest servicers, which is WHY one finds that essentially ALL of the large banks which have survived and which have large mortgage banking operations are engaged in the worst sort of criminal misconduct.

But there is also an interesting corollary which may be drawn from this model: Usually, once the servcing rights have been acquired by a large criminal enterprise, that is where they remain until the fraudster has profited from the servicing by padding the borrower's loan accounting with all manner of unjustified and fraudulent fees.

Servicing rights may therefor by transferred one or more times over the life of the loan, but once owned by the very most dishonest enterprise, there is little reason to sell the servicing again, because the owner of the rights is already an entity that specializes in giving the borrower a haircut and stealing their equity.

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Now there are some exceptions to this general rule, particularly since the meltdown of the housing bubble. As some large investment banks have divested themselves of their servicing entities, these servicing entities have been sold or spun off, and the servcing rights transferred to the survivors. Thus, we have seen a continuing consolidation as predatory firms like Ocwen Loan Servicing have picked up the scraps from failing losers like Litton Loan Servicing. Similarly AHMSI has been picking up scrpas from failing subprime servicers.

So it is NOT altogether unusual or out of the ordinary for a large portfolio of servicing rights. But these loans are NOT usually transferred one loan at a time.

If your loan was sold as part of a group of loans this might make sense. But the purchaser would NEVER, EVER simply declare a default after buying the servicing rights. They would always first begin a program to create a false alternative accounting by padding your loan account with various fraudulent fees.

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Another common scenario occurs when a foreclosure is totally bungled or the loan file is discovered to have multiple anomalies that might make foreclosure difficult. This sometimes happens well after a borrower defaults, whether due to the borrower's actual distress or after a default created through pretext by the dishonest servicer.

When the servicer and foreclosure mill discovers that there are some really serious problems with proceeding with a foreclosure, sometimes the servicing and/or the ownership of the distressed loan (already in default) is then transferred to yet another entity that specializes in profitting from foreclosures. Thus, there are occasional one off or small group loan sales of loans already in default where a foreclosure is either already underway or soon contemplated. But these problems with the loan file or the foreclosure would NEVER be discovered in the ordinary routine course of business. They would only be found after a loan was well into default, usually 90 days or more past due.

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This brings me back around to your assertion of facts in your case, which I find sufficiently fantastic as to not be believable at all. That is, defaults and foreclosures NEVER happen the way you describe. The servicers are totally dishonest, but they also have very recognizable MOs and your facts are totally contrary to any recognizable MO.

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It is therefore my suspicion that you have left out one really critical fact, which would readily explain the scenario you have outlined and harmonize your description of the problem with reality.

There exist a very large number of swindlers and scam artists who routinely engage in what has been labeled "debt elimination scams". These scam artists -- often the very same folks who were working as loan brokers for the subprime operators during the bubble -- have used a variety of online websites to falsely represent that a borrower can avoid responsibility for their mortgage by using one of a variety of tactics recommended by the scam artists. The scam artists SELL the borrower various "products" which are represented to assist the borrower to obtain a "free house".

One of the most popular of these scams is the so-called "Quiet Title" scam. The story told the borrower is that the entity to whom the borrower is making payments cannot prove its ownership or holdership of the loand or entitlement to receive monthly payments. The borrower is then encouraged to file a so-called Quiet Title suit against the originating Lender, MERS, the purported mortgage investor and/or the servicer. Who the borrower sues hardly matters, because these suits are always specious and never actually successful. The suits serve only as the vector for the swindlers and scam artists to harvest their windfall of fees from their mark!

When the scam began, it was mostly marketed only to those in actual distress. But the scam artists managed to gain such great traction and to find such an ocean of idiots to defraud that they soon began marketing the Quiet Title scam to borrowers who were actually in no distress at all and actually current with their loans.

The story told these borrowers was that they could continue to make their current monthly payments during the pendency of the Quiet Title suit, but at the conclusion fo the suit, the borrower would get a "free house", clear of the mortgage lien, which would be erased through the Quiet Title action.

Now here is the ugly truth, which has no been often learned by those foolish enough to fall for this scam. Not only is the borrower out of pocket for the various fees and amounts paid for fraudulent products sold by the scam artists, the borrower is also totally responsble for ALL of the legal fees paid by the servicer in defense of the Quiet Title suit. This is true even without a court order dismissing the Quiet Title action.

For the servicer, this is almost like a dream come true, because the servicer can employ (and usually does) the very most expensive law firm, usually someone who is a relative of one of the key officers of the servicer, to defend the action and can immediately ADD the full amount paid these attorneys to the borrower's mortgage balance. But not only is this amount added to the balance due, it can be added to the NEXT MONTHLY PAYMENT due by the borrower.

The result is then that the borrower has precipitated the default simply by filing the Quiet Title suit!

Because the scam and these suits have become more common, several specialty servicers have emerged which will immediately purchase the loan (or servicing rights) which is the subject of the Quiet Title action.

Thus, we have a fact pattern such as you describe. You claim to be "current" on your payments, but are already asserting a lack of right of enforcement in the servicer, because you have already bought into Quiet Title debt elimination scam mythology. So my guess is that you paid the swindlers and already filed a suit. The servicer -- SPS -- then immediately sold your loan to a specialty servicer which profits from workouts of the loans involved in the Quiet Title scam.

Usually about $10,000 to $25,000 is added to the borrower's loan balance as a fee to defend the Quiet Title suit. When you refused to pay this amount added to your monthly payment (at the assurance of the scam artists that this was OK), the specialty servicer declared a default and you will soon be losing your home.

This has happened over and over again. Of course, the scam artists and swindlers never tell you that most of their customers have lost their homes following the recommended strategy. This is now a well worn path and thousands have lost their homes this way. It may be tens of thousands.

The actual foreclosure following victimization by the Quiet Title scam artists is usually quite rapid in the non-judicial foreclosure states. It often takes a little longer in the judicial foerclosure states. But the loss of the house is almost universal when borrowers buy into the scam.

If you bought into a Quiet Title scam and initiated a Quiet title suit at the behest of the scam artists, probably the very best course of action is to immediately contact someone in law enforcement. While these folks may not be able to help you get your money back (money you will almost never recover, since the scam operators work out of boiler rooms, use various aliases and move quickly to evade prosecution), you MIGHT be able to assist in the successful arrest and prosecution of some of the operators.

Recovery of money you expended buying the scam products would require civil action on your part. The scam artists will have already spent your money and will be quite adept at hiding it, since they are simply operating a criminal enterprise. One of the largest of these swindlers is operated out of Arizona by an attorney who has added a lot of fine print to all of the documents whereby you waive all of your rights and are actually dealing with judgment proof entities other than those marketing the scam.

Getting your mortgage reinstated is going to be far more problematic. If you have a lot of equity in your property and act quickly, the servicer may allow you to pay off the $10,000 to $25,000 in legal fees over time. If you only just filed the Quiet Title suit, you may be able to negotiated this amount down, but it is almost certainly going to require the intervention of an attorney and NOT the attorney that you employed to file the Quiet Title action, as he is usually in on the swindle.

The bottom line is that those who fall for the Quiet Title scam and actually initiate litigation based upon the scam usually find that their mortgage balance has been padded by about $10,000 to $25,000 and most usually lose their homes, even when they never missed a regualr payment.

The authority for charging you their legal fees is written right into the mortgage, deed of trust, security deed or other mortgage security instrument.
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tw
Is the firm Veriquest Financial or Vericrest Financial??

Vericrest Financial seems to be the successor to subprime operator CIT Group/Consumer Finance, Inc.
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Matthew
Andrew, thank you for the thorough and insightful response. I agree that the original post just doesn't add up. I have a friend who bought into the quiet title bs and got burned. Just as you said, they added the legal fees from the quiet title case to his balance and payment and then simply declared default and conducted a private sale. They had possession of his house and he was on the street before the quiet title action ever came to trial and of course it was eventually dismissed.

Based upon the prior post, I found this glowing description of Vericrest Financial:

http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245303709812

I share this link not because of the truthfulness of the S&P representations, but rather because it does contain some possibly valid information and insight that might be helpful to the borrower dealing with this company. Note that Vericrest was acquired by LoneStar in March 2009.
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Texas
Matthew, who heavens name is Andrew.

As for as Anthony's post, need a bag of pop corn and can of soda, about as long as a soap opera.
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Matthew
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Matthew, who heavens name is Andrew.

As for as Anthony's post, need a bag of pop corn and can of soda, about as long as a soap opera.


Texas, you got me on that one, man! By the time I finished reading Anthony's long post I had forgotten his name and called him Andrew! I guess I should have opened another window for reference. Sorry about that.

Anthony's post was a pretty good though. Anthony seems to really know what he is talking about. Dont you agree?
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Larry
I agree that Anthony makes a lot of good points. But I would disagree with him about whether Vericrest has recently engaged in bulk servicing purchases. Independent of the original post, the financial press has reported recent purchases of servicing by Vericrest, which is known to be a really sleazy outfit:

"Vericrest Financial scoops up $2.7 billion in MSRs" (November 27, 2012)
http://www.housingwire.com/news/2012/11/27/vericrest-financial-scoops-27-billion-msrs

One thing that I think Anthony is probably right about though is the quiet title thing. There is a buzz that Vericrest Financial has developed a new servicing specialty in loans which are subject to quiet title suits. This is supposedly a major new profit center for the subprime servicers because there are some folks who are so stupid that they initiate a quiet title suit even when they have equity in a property. This gives the servicer a unique opportunity for equity stripping that used to be used prior to the housing price collapse!
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Anthony,

I'm sorry for all of your anger and is misdirected.

Larry, thank you for doing some backround.

Anthony, I would attatch a copy of the letter sent from Veriquest for your review, yet your demeanor is not one of helpfulness. You seem to have a disdain for borrowers. Your post contains dated information...and, no, I'm not stupid and did not file a quiet title.

Why is the moderator allowing this sort of advice? That is the longest post berating a homeowner seeking advice/help. With the exception of those who did some research, and again thank you...won't be seeking 'help' again.

Anthony, have a blessed day!
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Eric
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Anthony, I would attatch a copy of the letter sent from Veriquest for your review, yet your demeanor is not one of helpfulness. You seem to have a disdain for borrowers. Your post contains dated information...and, no, I'm not stupid and did not file a quiet title.


Whether or not you like, respect or appreciate the responses you receive from others at MS Fraud, you should take particular care not to post identifying details about your particular grievance or case agaist Vericrest Financial. No good can possilby come of publicly posting information that could be used against you by your adversaries.

Do not be so quick to condemn what Anthony posted. He took a lot of time to post some generally accurate and useful information. Even if this information was not useful to you in your particular circumstances, the number of people who have been drawn in by these scams, and especially the Quiet Title scam, is stunning. Moreover, many of the victims have not even figured out that they have been ripped off and have swallowed the bait, hook, line and sinker! Despite the fact that these folks have thrown thousands of dollars down the rat hole with the scam artists and now face tens of thousands in additional legal fees and the loss of their homes, they have bought into nonsense that the are entitled to a free house and actually believe that they are victims of judicial corruption rather than appreciating that they are merely victims of a crude swindle. Posts like Anthony's are very important to help inform and protect the public against these scoundrels. Your attacks on this helpful and charitable messenger are ill directed.
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$&?!
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Do not be so quick to condemn what Anthony posted. He took a lot of time to post some generally accurate and useful information. Even if this information was not useful to you in your particular circumstances, the number of people who have been drawn in by these scams, and especially the Quiet Title scam, is stunning. Moreover, many of the victims have not even figured out that they have been ripped off and have swallowed the bait, hook, line and sinker! Despite the fact that these folks have thrown thousands of dollars down the rat hole with the scam artists and now face tens of thousands in additional legal fees and the loss of their homes, they have bought into nonsense that the are entitled to a free house and actually believe that they are victims of judicial corruption rather than appreciating that they are merely victims of a crude swindle. Posts like Anthony's are very important to help inform and protect the public against these scoundrels. Your attacks on this helpful and charitable messenger are ill directed.


I agree!  Scam artists often use the pretext of shill posts purportedly by distressed borrowers to obliquely re-introduce their various debt elimination scams.  This is a classic strategy employed by Mike H. who lurks in the background, always posting his e-mail link on the hope that he will occasionally draw in some fool who can be induced to take the discussion offline into e-mail so that his various fraudulent claims can be made without any peer review or assessment or otherwise to be exposed and refuted by seniors at the Forum.

Mike even then makes the specious claim that somehow his fraudulent assertions have some greater authenticity because he is posting his e-mail address, which he instead is doing simply to identify and victimize new victims.

Another of Mike's scams is to post under another name, including an e-mail link.  Then this fictitious person recommends Mike and his fraudulent UPL services.  Mike has done this repeatedly and been caught repeatedly.

It is especially disgusting that Mike attacks an honest senior such as Texas, when Mike is a criminal.

Others in this thread were correct to reinforce the fact that Quiet Title is always a debt elimination scam and that those extolling this as a solution are always preying upon distressed borrowers!
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