On Your Side: Mortage Fraud

WRDW.com ^ | 2/23/2007 | Jeff Anderson

[ex-Texan]

The FBI says it happens more in Georgia than in any other state...and you could end up losing your home because of it.

It's called mortgage fraud.

Maybe someone steals your identity and takes out a loan, or maybe your company tacks on illegal fees.

12 On Your Side's Jeff Anderson tells you how not to be a victim.

Shirley Alvarez made a career out of serving her country in the military. But after she got back from her last stint overseas in Korea, she says she got a nasty surprise.

"They told me I missed a mortgage payment," she said.

She says that was virtually impossible because the military paid her mortgage like clockwork.

When she finally talked to a representative at Countrywide Mortgage, they told her company records indicated she had been late on every payment for eight years.

"I'm looking at seven or eight thousand dollars in late fees."

Not to mention thousands of dollars in other miscellaneous fees. Shirley's attorneys eventually advised her to sell her house. In the process she says she lost a lot of money and her comfort zone.

"I haven't lived in an apartment for 30 years," she said.

Shirley isn't the only who feels like she got shammed.

"I send them in by money order...that way I have my receipt," Chris Williams told 12 On Your Side.

Chris has been paying her mortgage that way for years. She and her husband did get behind on their payments, but then she made six straight double payments of more than $800 each to get caught up. To her surprise, EMC Mortgage told her they never got the extra money...even though it was sent in by money order.

"They're not returning my money, but yet they say I'm behind on my house."

How much is she behind? EMC tells her she owes more than $11,000. She knows she was late a few times...but that's a lot of late fees.

If she can't pay it, she may lose her house.

As of now, neither accusation has been proven in court. 12 On Your Side is talking with both mortgage companies about these problems, looking for a resolution.

You may wonder how this could happen...but several websites have pages and pages of complaints about these sorts of practices.

In 2003, mortgage company Fairbanks Capital settled with the Federal Trade Commission for $40 million. The company was charged with, among other things, levying illegal late fees and other unauthorized fees.

Shirley and Chris' attorney, Angie McElroy, has been dealing with these types of cases for years. She says even though these are big powerful companies, you do stand a chance to set things right.

"They're pretty good if you call them on it," she said. "A lot of times mortgage companies will settle."

That's just what Shirley asked McElroy to do...and the first step is a 40 page legal complaint. The goal is to get Shirley's money back--money she feels was deceptively taken from her.

"Big time...cheated, abused, feel like I been raked through the coals," she said.

There are ways to protect yourself.

Every year, ask for a transaction history from your mortgage company, not a payment history. A transaction history will have all the fees.

Countrywide said this about Shirley's mortgage:

Countrywide deeply regrets this issue was not resolved in a timely manner.

When Ms. Alvarez's situation was brought to our attention, we took immediate action to rectify the situation. The late fees in question will be immediately refunded.

But they didn't have Ms. Alvarez's contact information. They wanted it from us.

Ms. Alvarez tells 12 On Your Side she doesn't want to talk to them.

Her attorney says she should get about $6000 in refunds.

After 12 On Your Side looked into the complaints, EMC Mortgage representatives say the extra charges on Chris Williams' home were a mistake and will make things right.

That will save her $11,496.

Adding both of those to our 12 On Your Side cash register, we've gotten $200,460 back for you.

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[M. Espinola]

"Who is going to buy all those overpriced houses with all the fraudsters shut down?"

These crumb bums will continue lying to potential customers right up until the second they slam the front door of their 'front' office.

[Concentrate]

So-called sub-prime lending is collapsing, which means the end of no-doc and 100% financing. And that means that most of the speculators are out of the market. Well, actually, they're still quite in the market trying to sell they're over priced houses. Good luck with that.

[Pelham]

Got fraud?

check this out:

http://bubbletracking.blogspot.com/2007/02/fraudera-ranch-its-family-affair.html

[ex-Texan]

The Fed pumped up money supply and liquidity in order to create a massive housing bubble, which was used to drive consumer spending so as to placate and confuse an American population who had lost their manufacturing base and world competitive position.

Here's the Bank of England last week though, in a stunning admission on their housing bubble cause and effect. What they didn't touch on (yet) is that all asset bubbles deflate, all financial manias die, and all periods of low risk premiums reverse:

"Investors are likely to take advantage of this ample liquidity and the associated easy credit to purchase other assets, driving risk premiums down and asset prices up," the BoE told parliament’s Treasury Committee on Feb 20th."

More Foreign Goods Headed for Wal-Mart

What kind of a country are we when we no longer make anything, we no longer produce, we no longer save, we no longer have the ability to provide for ourselves, and we no longer have the capacity to pay back our debts? All we do is sell real estate back and forth to ourselves at tremously inflated prices.

"Nothing to see here. Time to move on."

[ex-Texan]

My bad. "tremously inflated prices" ought to have been "tremendously inflated prices."

[garandgal]

A few years ago, this same mortgage company "misapplied" one of my payments.

I had the bank records showing the bill had been paid...and when I called they admitted that they had applied it to the wrong account. Every time I called, for FOUR MONTHS, they admitted it. I was getting collection calls on a daily basis for being 60 days late on my payment...went all the way up to the customer service manager...with assurances each time (at least twice/week) that the situation would be rectified.

After four months of spending several hours per week dealing with these people, I called the State Attorney General's office. They directed me to the head of Banking for our State. I made one phone call; wrote a letter; and attached the documentation. The Banking Division, in turn, wrote a letter of inquiry to Countrywide; I received a letter of apology and phone call from the office of the CEO of said mortgage company within a week.

Incidentally, they actually had the gall to scold me for getting the State of Iowa involved. They still have not corrected the problem on my credit report, or in their internal credit files...despite assurances in the letter from the CEO that they would do so. Moral of the story: contact your elected and appointed representatives when these people get out of line...that is their job.

[ex-Texan]

You ought to sue the bastards and request $ 1 million in punitive damages. You ought to have ample evidence of intentional conduct. Slander of credit is a serious tort. Go after them with a vengeance. Countrywide is rumored to be the next corp to be facing investigations in several states.

[M. Espinola]

Very good points. What effect do you believe would happen on the current housing market situation if there is a doubling of energy prices, which could happen contingent on the unstable actions of Iran's ruling Islamic tyrants?

[M. Espinola]

The economic clock is ticking but very few understand what time it really is.

[RockinRight]

For whatever it's worth, it IS possible to go straight to the credit bureaus, and bypass the lender to get the payment history corrected - I've helped a couple of clients of mine do that.

Then at the very least, you could refinance with a more reputable lender. They are out there.

[Trailerpark Badass]

That's why you set up to have your mortgage payments paid automatically from a bank account.

[goldstategop]

NOT a lender. Consumers can choose a lender when they buy a home but they have no choice over who SERVICES the loan. In the mortgage industry, one company lends the money and another collects the payments for them. Its the mortgage servicers that are most abusive since all they do is collect money on behalf of... you guessed it - the lender. Think of them as a half-assed collection agency that doesn't care to treat you right even when its NOT your fault. Over the course of a loan's lifetime it can go throgh through three or four service companies. And if one of them happens to be the mortgage service company from hell, you're stuck with them. You have no way to change them and get better treatment from someone else.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[RockinRight]

Theoretically, any lender can sell a loan to a servicer, but there are ones that rarely do.

I work in the mortgage industry. For example, Creve Cor Mortgage sells 100% of their loans. Countrywide sells less than 10%. Aside from the above-mentioned issue they tend to service their loans well. Ameriquest is historically bad at servicing.