(5/16/2011) - Think federal regulations are making mortgage lenders
behave?
Do you believe mortgage lenders have seen the light and want to make your
experience as low cost as possible?
Have you been told the mortgage lending trade is looking for ways to cut
your costs?
Bullocks.
Fugedaboudit.
Getting a home loan is an adversarial proposition. It's you against
them.
The cost of doing business in mortgage lending includes finding more and
more ways to separate you from what's in your wallet and regulations are typically too little,
too late.
• 1. Misapplied payments. Even when payments are made on
time, mortgage servicers "mistakenly" reject the check or apply it to the
wrong account. The result is unjustified late fees and often other penalties as
well. For homeowners, misapplied payments are a huge headache; for loan
servicers, misapplied payments mean a chance for more income.
• 2. Illegal fees. It's not legal to charge the homeowner
when the loan company pays for property monitoring or price opinions from
brokers (BPO), but they do.
• 3. Two-faced "assistance." Many homeowners who are actively
working with their mortgage servicer to work out their loan are surprised to
learn that the company is also actively pursuing foreclosure, something
called "dual tracking."
• 4. Blocked refinances. Loan servicers don't like to lose the
steady income flowing from their mortgages, so it's in their best interests
to stall attempts to refinance with a different company. Some loan servicers
have refused to provide loan payoff information, preventing refinances and
even home sales.
• 5. Squelched legal rights. Loan companies often include
"waivers" with their loan modifications, which essentially say, "If you
accept this modification, you give up your right to pursue any legal
actions against us no matter what egregious acts we commit."
• 6. Botched taxes and insurance. Many mortgages have an escrow account
for taxes and insurance that the loan company manages -- or not. When the
company fails to pay these expenses on time, the homeowner is stuck with the
penalties. And some companies require expensive hazard insurance (to cover
damage from accidents, storms, etc.) even when insurance is already in
place.
• 7. Zipped lips (no communication). When loan servicers
believe a homeowner is late on a mortgage, it's important to send a notice.
Sometimes they do, sometimes they don't.
• 8. Whirlwind foreclosures. Each state has laws
governing the foreclosure process and when a lender can initiate
foreclosure. In the rush to foreclose, some loan companies ignore key steps
required by law.
• 9. Crazy foreclosures. This one is hard to believe, but it
happens: the loan servicer begins foreclosure proceedings even though the
homeowner is current on the mortgage.
• 10. Robo-signing and other
fraud. Loan companies fail to review key documents or falsify court
documents used to evic -- often because the companies haven't kept accurate
records of ownership, payments and escrow accounts that would enable legal
foreclosures.
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