Buy a House, Make Your Payments, Then Discover You've Been Foreclosed On Without Your Knowledge

[xchrom]

http://www.alternet.org/economy/buy-house-make-your-payments-then-discover-youve-been-foreclosed-without-your-knowledge?akid=10963.277129.1Y3NxR&rd=1&src=newsletter899822&t=3



A few months ago, Ceith and Louise Sinclair of Altadena, California, were told that their home had been sold. It was the first time they’d heard that it was for sale.

Their mortgage servicer, Nationstar, foreclosed on them without their knowledge, and sold the house to an investment company. If it wasn’t for the Sinclairs going to a local ABC affiliate and describing their horror story, they would have been thrown out on the street, despite never missing a mortgage payment. It’s impossible to know how many homeowners who didn’t get the media to pick up their tale have dealt with a similar catastrophe, and eventually lost their home.

As finance writer Barry Ritholtz has explained, home purchases involve a series of precise safeguards, designed to protect property rights and prevent situations where borrowers who are perfect on their payments get evicted. “In a nation of laws, contract and property rights, there is no room for errors,” Ritholtz writes. “The only way these errors could have occurred is if several people involved in the process committed criminal fraud.”

Any observer of the mortgage industry since 2009 is no stranger to foreclosure fraud, and the fact that virtually nobody has paid the price for this crime. But the case of the Sinclairs involves a new player in that rotten game: Nationstar. Unheralded just a few years ago, the firm, owned by a private equity behemoth, has been buying up the rights to service mortgages, accepting monthly payments and distributing the proceeds to the owners of the loan, taking a little off the top for itself.

[CurtEastPoint]

1. This is criminal. See this for customers' impressions of this scam company:

http://www.yelp.com/biz/nationstar-mortgage-plano

[CrispyQ]

2. Lying, thieving fuckers.

Nationstar is no different in the non-bank servicer space. While the company promised California [19] that it would adhere to all settlement obligations on the servicing rights it purchases, the Sinclairs were subjected to familiar abuse. The family paid their mortgage on time since purchasing their home in 2003. Last year, they received a loan modification. But their servicer sold the rights to Nationstar, and Nationstar didn’t honor the modification. In June, the Sinclairs sent in their mortgage payment, and Nationstar sent it back in full. Then it sold the home. When questioned, Nationstar claimed the Sinclairs didn’t notarize one page of their modification, which turned out to be untrue.

Even if it was true, they will try to take your house because you forgot to get one page notarized. Lying, thieving fuckers.

[enlightenment]

3. Too bad there isn't some way to

stop these abuses.

Maybe we could start by throwing out every politician at every level who has ever accepted a dime from the banking/mortgage/shake-down industry . . . but then we probably wouldn't have enough left to turn off the lights.

[Buns_of_Fire]

4. I keep expecting someone to go Dan Logan on their asses.

Who's Dan Logan? He's the main character in a minor 1972 movie starring George C. Scott called "Rage" ( http://www.imdb.com/title/tt0069158/ ), who, after getting the royal runaround from the military about the death of his son, finally snaps and goes on a rampage against them.

I don't condone such actions, and I certainly don't recommend them, but the fact is that many people's nerves (and patience) are stretched pretty thin these days.

[sorefeet]

10. I'm in the process of buying

a home right now. First one, I'm 61 years old. IF ANYTHING HAPPENS to me like that, you will certainly read about it in the news. I am way too old to give a fuck now and I will not be ripped off and just leave peaceably. I have had all the screwin I'm going to take from the corporates.

[Buns_of_Fire]

17. Congratulations, and best of luck.

MOST mortgages work out a lot better than the one in the story, so I think the odds are with you. Just remember that the grass is always greener over the septic tank.

[Liberal In Texas]

5. I've come to the conclusion reselliing mortgages should be illegal.

Get a loan or a re-fi and with a company that has a good reputation and you have some confidence in and within a month or two they sell it to some other mortgage company. A lot of times in my experience we cringed when we saw who bought our mortgage. One went bankrupt and was serviced by somebody we never heard of. It's like you don't have a choice who you end up doing business with.

[Xyzse]

13. I can agree with this.

This is where we got in to trouble, and the place they sell it to tend to break the initial agreement.

[Adsos Letter]

6. Recc'ing for exposure.

Shine a big, bright spotlight on these fraudsters.

[dixiegrrrrl]

7. Nation Star was one of 2 major servicers

that Bank of America and other large banks sold ther mortgage servicing rights to, this spring.
The reason they sold the servicing rights was to avoid having to play by new rules that Congress imposed.
These rules DO NOT apply to Nation Star and Green Tree mortgage servicing companies, both of whom have a long history of ripping off homeowners.

Sadly, my mortgage is now with Green Tree, who has been flooding me with offers to re-finance.

[AtheistCrusader]

8. Yep, green tree has been up my ass to refinance too.

Apparently I am paying too little in interest.

[dixiegrrrrl]

15. Indeed..the one thing they do NOT point out

when attempting re-fi....the interest payments start at day one again.

Makes me uneasy that they actually can profit more from foreclosing than from holding mortgages.
That may explain the wave of foreclosures on people who were compliant with their payments.

[MindMover]

9. Government has to start lending directly to borrowers ....

Private banks are corrupt ...

[hfojvt]

11. oh come on

the only way errors are made is because of criminal fraud?

That's an absurd hypothesis.

The Loomis family history quotes Pope on this

"Whoever thinks a faultless piece to see,
thinks what ne'er was, nor is, nor e'er shall be."

The person conflating an error with fraud, in this country, in this day and age, is most likely a lawyer who wants to take somebody or some organization to court and win him/herself a nice little piece of a big settlement.

Uh huh, and a quick google search shows that I nailed it
"Mr. Ritholtz performed his graduate studies at Yeshiva University’s Benjamin N. Cardozo School of Law in New York, where he focused on Economics, Anti-Trust and Corporate Law."

[crim son]

12. Check out the review link on response #1.

The company sucks and if Ritholtz makes money nailing them, good for him.

[magical thyme]

14. looks like they make a lot of "mistakes" that rack up a lot of late fees...

"CFPB found that servicers like Nationstar 1. often failed to inform homeowners about the change in servicing rights when they are transferred, meaning that the homeowner kept paying the wrong servicer. This is a clever way to facilitate late fees just don’t tell the customer where to send their money.

Servicers also 2. delayed property taxes paid out of escrow accounts, making borrowers late on those taxes and triggering more delinquency fees 3. failed to refund insurance premiums and other fees due back to borrowers did not communicate properly with borrowers in need of a loan modification; 4. lost documents solicited from borrowers for that process and made it impossible to complete the applications; 5. failed to even properly file documents associated with the transfer of servicing rights; and 6. charged customers default fees “without adequately documenting the reasons for and amounts of the fees,” and 7. neglected to waive certain fees or interest charges."

(bf #s mine)

And Ritholtz isn't the first lawyer to look at Nationstar's practices:


"Nationstar is being sued in New York’s Supreme Court for auctioning off non-performing loans that it would rather not service at a severe discount, shortchanging investors in the process. The company’s auction sales, made with an online auction company that its private equity parent firm has a “business affiliation” with, end up allowing Nationstar to recoup its take, with all the losses falling on the underlying loan owners. So Nationstar has managed to infuriate both sides of the mortgage deal, the lenders and the borrowers, with its unscrupulous practices."

With 8 types of common "mistakes," plus a state suing them, I kind of see a pattern of behavior here. Fraud doesn't seem to strong a word, imo.

[Enthusiast]

16. It might be criminal fraud but no one will serve a sentence in prison for it.