You bought your house then your loan was sold to a national bank, which acts as a loan servicer, then resold without your permission, this is part of the process you are told, you trust that since the loans are guaranteed and sold to investors by Fannie or Freddie or Ginnie you will be protected.
When your loan is sold between investors to a different company which services the loan, the new servicer loses or refuses to accept payments or misapplies them, using the transfer to the new servicer as the excuse for the accounting errors. You may also have fallen behind on your house payments due to job loss or medical problems or another good reason. You can get caught up and make the payments but payments have been refused or returned or misaccounted and you may or may not have been given notice of foreclosure. You may or may not have been given a chance to do a payment plan called a forebearance agreement or loan modification to save your house and get caught up on your payments.
Your family and friends usually believe you are a deadbeat and abandon you, thinking you have done something wrong since they believe the banks are always right.
You can't find an attorney who will help you do anything but file a simple bankruptcy and do not want to fight the banks in litigation since they have vast legal resources and can spend more than you can and tie the case up in the courts and the attorneys say ultimately you will not win.
The banks lead you into a trap, promising to make a deal to save your house, by giving them more money to do a new deal. Then they raise the money you need to do a deal and say you do not qualify for the deal any more and now that more time has gone by you are further behind. You say if we cannot do a deal I will sell the house or return it to you so you can sell it. They tell you not to worry about that we will do a deal and you will save your house. They say they do not make money on foreclosures and are only interested in helping you keep the house. Then they take the deal away since you cannot pay the now growing amount needed (which they control) to save your house and they foreclose on your house and take your equity and your investment and your piece of the american dream.
If any of this sounds familiar, you may already be a victim or about to become a victim of a complex new process of fraud which is just now being understood called predatory lending and mortgage servicing fraud. Our society and most of the legal community is not yet fully aware of the problem and believes you are a deadbeat who deserves to lose their home.
This process is complex and can be done in several ways and usually involves:
Origination fraud by false appraisals and other predatory lending methods in violation of consumer protection laws, then mortgage servicing fraud, the improper accounting of payments, the return of payments which leads to abusive foreclosure and the loss of your home and equity. Your Constitutional rights are lost because a federal bank can get around state consumer protection laws.
Based on what is posted on their website, the NCRC is against Federal Premption of States local consumer laws by National Federal banks by the OCC which regulates them. This is a very important issue as it allows the servicers in most cases to get around the legal protections each state has when making mortgage loans which are then passed to the various servicers from other states who do not always follow the proper procedures and attempt to provide loss mitigation while charging growing fees and returning payments and misaccounting payments to create a default then ultimately try to take your house and equity by foreclosure.
What can you do?
Refinance with a local bank or credit union which does not sell your loan into the secondary market. Do not get a loan from a mortgage broker or bank which sells your loan to investors.
If your credit has been damaged by the actions of the servicer not recording payments properly or refusing payments, sell your house before they take it.
Unfortunately, except for a handful of cases, the legal community is unwilling to take action against these large federal banks who act as mortgage servicers. Even when they do and get a ruling against them it is difficult to enforce the law as the mortgage banks keep on operating the same way under a different corporation, getting around the intent of the law again. The people in government seem to be unable to force them to obey the court orders.
If you are behind on your loan or facing foreclosure the NCRC can give you options or using a rescue fund may be able to help refinance into a safe loan.
Consumer Rescue Fund:
Fair Lending Specialist
727 15th Street, Suite 900,
Washington, DC 20005
P: (202) 628.8866
F: (202) 628.9800
THE NATIONAL MORTGAGE COMPLAINT CENTER
They will review your mortgage HUD documents to check for any problems like nondisclosed fees or prepayment penalties or Yield Spread Premiums which are kickbacks to mortgage brokers. Use their service to be sure you are or have not been not overcharged. Just because the loan is written on HUD forms does not mean it is a fair loan.
Sometimes the mortgage brokers say a loan is a no closing cost loan then they charge a Yield Spread Premium which means the closing costs are rolled into the loan and you are paying them in the form of a higher interest rate and the broker gets the closing costs as a kickback at closing. You think that the loan is a no closing costs loan but the kickback is not fully or properly disclosed to you at closing and this is not a good deal for you.
There is a website called msfraud.org which details the process of Mortgage Servicing Fraud, and has great info, hit all the links to learn about the process.
Info added Feb 2010:
During roughly the past year attorneys have devised some legal strategies which can work to save your home.
Here are 3 documents from April Charney of Jacksonville Legal Aid:
Basic Foreclosure Defense Manual
Ocwen-Anderson Report Sue First Ask Questions Later
Foreclosure Fraud Guide To Looking Up Public Records For Fraud
There is a website called Living Lies which has great info on foreclosure defense, strategies and resources, and good info also on msfraud.org.
Read the books and reports press releases mentioned here and below to learn more about what can be done.
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Info added Feb 2010:
If you are one of the over 20 million americans this decade who have faced or are facing foreclosure use this site as a resource for help. We have all seen what the Federal Banks are doing with Wall Street and the bailouts etc. The government seems still to not be able to stop most of the foreclosures, many of them illegal. Today there are a few more lawyers who can help but Main Street is still more or less on it's own.
So many victims ask:
Why did they foreclose on my house?
When I can make the payments.
Why did they refuse my payments?
Why did they return my payments?
Why did they refuse to modify the loan?
Why did they misaccount the payments?
Why did they add all those fees?
Be prepared to fight and organize your info into a factual timeline of events. Contact this site via email to be referred to an attorney or public legal aid resource for free. info
Info added Jan 2006:
So, it is another new year. This year, we are learning about corruption in government in the news with new developments weekly of "biblical proportions" on the scale of or surpassing the Watergate scandal of the seventies.
The holidays have just passed, and for many of those who lost their homes, they were empty, surreal times, watching other people whose dreams are still intact enjoying themselves and celebrating with their famiies in their homes they have worked so hard to attain as part of the american dream.
We await more news of the scandals in Washington and we will see how far they go, how far they extend into the levels of government and how deeply rooted the corruption is in the housing and financing markets.
There have been some recent legal victories, where a few of the victims of the massive fraud perpetuated on the people by the Federal Banks involved in the mortgage servicing business and the taking of people's houses and dreams by nefarious legal tactics, have had the remaining resources to file civil suits and have been awarded damages. There are other cases in process, but for many there is no hope, no assistance from the government, no classification of this activity as criminal.
One begins to wonder how this is all tied into the scandals we are hearing about, how the financial institutions were bribing and buying members of Congress to write laws which favor the corporations and not the people whom the government supposedly serves. Will we correct the problem, will we forget the guilty pleading lobbyist who has yet to name the names of his clients who are members of Congress or will it be business as usual, putting profits before people.
How deep will the scandals go into the very infrastructure of our society, the foundation of the economy and our way of life, the american home and the financial instruments associated with the housing market?
What remedies will be offered to the people who have lost their homes not by a natural disaster, but by the predation of the corporations on members of our society, on our fellow citizens. Can the judicial system correct the problem or are they also bought and sold like commodities or financial instruments in quasi government corporations which guaranty the mortgage notes which our houses and equity are backed by.
Are the judges finally waking up and opening their eyes to what has been going on relevant to mortgage servicing and ultimately foreclosure fraud in all of it's various forms or are they still unable to let their eyes see. Are they simply unwilling to tackle the problem for whatever reason or are they afraid to act, afraid to do their jobs or has the cancer of corruption infecting our government spread too far throughout the organism of society? We shall see, but will we all see the same thing? When will the victims who lost everything get their justice and real compensation for what was taken, not some watered down class action 300 dollar check like the tax rebates of a few years ago.
So there is more information to post about cases and legal resources and it will be posted soon. But for now one must pause and reflect as another year has passed and the government has grown more corrupt and that which was taken has yet to be returned. Has the process of justice started yet where the wheels are painfully slowly turning or is this just another illusion of justice in a society which says one thing and does another. Duplicitous is the word I think I am looking for. It seems that this is not my country any more.
The place I grew up in did not attack it's own people economically according to what we were taught in schools. Maybe they always have done this and we just did not know about it. Maybe now we have the internet to help us share the info and see the real picture. Regardless of how things turn out, we will survive we will get by but we will not be the same any more, our lives will never be the same, the happiness has gone from us, our society is in a sorry state. Let's watch government work and see if it is for or against us. Well at least we still have freedom of speech, for now at least.
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Info added July 2005:
Here is a link to a story from a Newspaper in Milwaukee about Predatory Lending and Mortgage Servicing Fraud which shows the trend - the banks are targetting people who most likely will not be able to pay back their loans, in this case because they are illegal immigrants and may be deported. Note that the article mentions that these loans are made with mortgage insurance. If they are then the bank gets their equity and all of the improvements and the investment the people have made and collects on the loan insurance and gets to charge fees during the whole process:
Click Here For Mortgage Program Targets Immigrants Story
Here is a link to a press release which mentions the response to Kelo v. New London in Texas:
Property Rights Advocates React to Eminent Domain Ruling, Texas Puts Issue on Call for Special Session
Other states are sure to react similarly, strengthening their laws. Is this the wake up call which we need to change our federal government? It is time to get our government in Washington which is not acting in the interests of the people to protect the interests of We The People, not the business interests of this country. Will the states enact laws to let victims reverse the illegal foreclosures retroactively since these federal lenders are in my opinion clearly getting around the state anti-predatory lending laws?