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Games mortgage companies play [Aug. 17th, 2015|11:12 am]
Today, I received mail from one of the many mortgage companies I deal with. It was a request for permission to contact a client of mine directly regarding a loan modification. This is a pretty standard form, so I signed it and prepared to send it back.

That's when things got a little suspicious. The form instructed me to send it back in the self-addressed, postage-paid envelope accompanying the letter. But the envelope I received had exactly one sheet of paper in it: the form itself.

Well, I thought, human error and oversights can happen. I'll just mail it myself. I looked the form letter over. And then studied it closely. I couldn't believe what I was seeing.

Though it's pretty standard stationery, there is no address to be found anywhere on this letter. No address, no fax number, and no contact number for the person who sent the letter.

I had so much trouble believing this that, even as I'm writing this entry, I paused to study that letter one last time. No contact information whatsoever appears on this letter. I can't help but assume that this is intentional: a false attempt to appear cooperative while actually stonewalling the borrower.

I wish I could say that such incidences are isolated. But my experience over the years is that mortgage companies are seldom cooperative in the loan modification process.

Whenever a client of mine has prepared a loan modification packet, I instruct them to send it by certified mail, so that someone has to sign for it, and to keep a copy of everything they've sent. Because mortgage companies are notorious for misplacing loan modification packets or claiming they never arrived.

In the worst incident, the borrowers had sent in 8 separate copies of the loan modification packet. Every time they finally got acknowledgment of receipt of the packet and began working with a mortgage company representative, that representative would get transferred, someone else would be in charge of their mortgage, and that person would not have a copy of the packet anymore.

By the time they came to me, they were fighting tears of frustration. A short-term layoff had gotten them behind on their mortgage, but because the mortgage company would not accept their payments they were now months behind, in danger of foreclosure, and the interest and penalties were piling up.

Unfortunately, there is very little regulation that forces mortgage companies to act in good faith. There have been some class action lawsuits leading to multi-million dollar settlements, and some borrowers are benefiting from those funds. But as far as actually changing the behavior of these companies on a day-to-day basis, the lawsuits have accomplished very little.

It's pretty appalling that we as a nation loaned money to these companies, sent none of the CEOs to jail, let them all pay themselves giant bonuses, and are still getting screwed over by them. But hey, corporations own the government now...

[User Picture]From: gythiawulfie
2015-08-17 05:14 pm (UTC)

I could not agree with this more

I have spent over 15 months arguing with Wells Fargo about the POA I have for my father's affairs. (He is unable to make decisions, and is in a nursing home for a great many number of reasons).

When his medical care took all his available income and left not enough to pay the mortgage, I had 3 buyers for the house. WF said that my POA was not enough to sell the house. My father cannot sign anything.

Long story short, I have his lawyer contact them, ok... ooops we are sorry, you can sell the house...

House was underwater, so I asked for a short sale, no....
I asked for cash for keys... no
Then I got not a single call or reply for almost 8 months... then all of a sudden they started contacting me..
4 months.... then no more contact... I have had letters from 27 different representatives..

Needless to say, dad's house is in forclosure and they STILL refuse to deal with me and apparently laws in his state do not allow them to deal with me, so they gave him a guardian ad litem...

And do you know what WF said, "Who, we never heard of her...."

I feel so sorry for your clients....
Dad loosing his house won't hurt him in any way, he is never going to live on his own again, or even assisted living... but man.....
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[User Picture]From: zoethe
2015-08-17 06:14 pm (UTC)

Re: I could not agree with this more

It's insane. How terribly frustrating for you.
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[User Picture]From: alexmegami
2015-08-17 05:28 pm (UTC)
That's horrifying. I worked for a private mortgage company up here (Canada, for other folks) for two years during the recession, and it was awful, but at no point would something like that from one of the banks or us have been in any way acceptable.
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[User Picture]From: zoethe
2015-08-17 06:14 pm (UTC)
All the time, here. All the time.
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From: anonymousalex
2015-08-18 01:38 am (UTC)
See, in Canada banks are generally well-thought-of and trusted by the public. Not so much in the US. Think it's a coincidence that US banks are deregulated and largely interested in investments?

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[User Picture]From: alexmegami
2015-08-18 04:34 pm (UTC)
Not even a little bit. It's one of the things I don't get about American politics as a whole, the idea that "regulation" is somehow a dirty word.
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From: anonymousalex
2015-08-18 05:25 pm (UTC)
It took several decades—I think the original plans were laid down in the '60s—but it is the direct result of a concerted P.R. effort.

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[User Picture]From: caudelac
2015-08-17 06:30 pm (UTC)
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(Deleted comment)
[User Picture]From: zoethe
2015-08-18 08:46 pm (UTC)
I haven't, but I will in the future! Thanks!
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[User Picture]From: dr_phil_physics
2015-08-18 06:33 am (UTC)
My parent's mortgage was regularly resold -- once three times in a single month. They were getting dunned by people who never held the paper long enough to receive a payment.

When we bought a house, we found a bank that doesn't sell its mortgages. It has been lovely to have few headaches over 22-23 years so far.

Glad you caught the questionable paperwork.

Dr. Phil
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[User Picture]From: tdanaher
2015-08-19 02:56 pm (UTC)
This is why my parents always pay cash for their houses. They are not even close to wealthy, living as they do on fixed incomes and barely above the poverty level, but they've had exactly one mortgage on a house they bought ($15,000 back in 1967!), paid it off as quickly as they could, and the three successive houses they've bought since then were all cash on the barrelhead. The peace of mind that comes with knowing a mortgage and all its complications isn't hanging over anyone's head cannot be overstated.
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[User Picture]From: zoethe
2015-08-19 03:02 pm (UTC)
Nice if you can do it, definitely.
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[User Picture]From: tormentedartist
2015-08-20 07:38 am (UTC)
Holy fuck balls. I guess its a good thing that my parents, never had to deal with that stuff. Good god. That is just so fucking scary. Make me want to move to iceland...
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[User Picture]From: cosmicbandit
2015-08-21 08:14 pm (UTC)
Ten years ago we had to sell our house because my husband got orders. We never ever missed or were even late on a payment. We had to short sell our house because of the market. It was a VA loan so the VA covered the shortfall. Wells Fargo did not lose a penney but they treated us like garbage and processed our sale as a foreclosure.
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[User Picture]From: zoethe
2015-08-21 08:58 pm (UTC)
They are terrible. It's appalling.
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