by Broderick Perkins
(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?
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.
The Center For Responsible Lending found 10 ways mortgage lenders try to generate fees at your expense.
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.Refinance at Today's Low Rates!
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