Mortgage servicers exist to help borrowers who are in default or are facing default. However, according to an official with the Consumer Financial Protection Bureau, many mortgage servicers are playing a “shell game” with homeowners and are failing to meet the standards set forth by the federal government.
Ideally, mortgage service companies are more effective than banks in protecting the rights of homeowners and helping borrowers avoid foreclosure. However, some homeowners are being as poorly treated by mortgage service companies now as they were by lenders during the housing market crash.
Servicers take mortgage payments directly from homeowners and forward them to loan owners. When working properly, they serve as a protective force between homeowners and banks. It is important to carefully monitor their actions because specialty companies now make up more than 17 percent of the mortgage servicing market. Furthermore, one in 10 homeowners are underwater and about two million households are at a “high risk” of foreclosure.
There have already been a number of issues regarding the sudden growth of specialty mortgage servicers. Ocwen Financial Corp, for example, had to pay a settlement of $2.1 billion for improper fees, failing to credit mortgage payments quickly, failing to honor trial modifications, wrongly denying loan modifications, and signing foreclosures without verifying information.
Homeowners should take these types of abuses of power seriously. Mortgage service companies are often not as helpful as advertised. Instead of using a specialty mortgage company, there may be other options available. It may be possible to negotiate a new payment plan with the bank. A counselor with the U.S. Department Housing and Urban Development may be able to offer guidance as well. In some cases, homeowners can simply avoid foreclosure by creating a budget and making smaller payments.
No homeowner deserves to be treated poorly by a bank or a mortgage service company. If you have been wronged, you have the right to fight back. Take the time to learn about your options and seek out support from an experienced Irvine real estate lawyer from McFarlin LLP who will fight for your rights. For a no-cost consultation, call (888) 728-0044.