Loan Complaints by Homeowners Continue to Rise
Posted by Lori Molloy, Esq. on May 30, 2014
Since 2009, homeowners facing foreclosure or seeking relief from predatory loans have attempted to navigate the Making Home Affordable Program (HAMP), dealing with their lender or servicer to seek a modified loan when possible. On February 14, 2014, The New York Times reported that complaints by homeowners were on the rise, citing miscalculated fees, wrongful evictions and more shoddy paperwork by mortgage servicers, such as Nationstar and Ocwen. Silver-Greenberg, Jessica and Corkery, Michael. “Loan Complaints by Homeowners Rise Once More.” The New York Times 18 February 2014. Web. 1 April 2014.
NPLS’ clients have been in the process of submitting workout packets to the mortgage company, such as Bank of America Home Loans, and offered trial plans, only to find after making a payment or two that the servicing rights to the loans have been sold. The new servicer may claim to not be aware of the trial plan, may delay making the modification, or may find other grounds to move forward with a foreclosure action. The servicing companies share of the market have increased from 3% in 2010, to 17% in 2013, reports the New York Times article. This in part due to pressure on banks to limit these loans from their portfolios; and servicers, on behalf of their investors, paying to take over more mortgages without sufficient resources to answer phone calls or adequately review each application for assistance. Homeowners may be offered modifications that allow them to hang on to the property for a time, but do not resolve the problem, and are not compliant with the agreements in place.
The largest banks entered into a $26 billion dollar settlement in 2012 as the result of foreclosure abuses. The Consumer Financial Protection Bureau and state enforcement officials, including bank regulators and state Attorneys General, can investigate these transfers and any further abuses faced by struggling borrowers. Homeowners who are eligible for HAMP or FHA-HAMP modifications should continue with the process without undue delay after transfer, and may need legal help or additional assistance from a local housing counseling agency. If you are a pro bono attorney, or interested in providing pro bono assistance with a consumer matter, a free seminar is being offered on May 9th by the Practising Law Institute, including Mortgage Servicer Litigation. Contact PLAN or your local NPLS pro bono coordinator for more information about this training.