Last updated 10/22/2003

About this Website

• Who is this site for?

• Who built this site?

• Why not focus on one company?

• Can this site be shut down?

• Are there memberships or fees?

• Can you explain the logo?

• How did you pick the companies on the Servicers page?

• How can I help?

• What is your privacy policy?

About the FORUM

• What rules do you have for users of The Forum?

• Who makes the rules and moderates The Forum?

Mortgage Servicing Fraud

• Isn't this the same as "Predatory Lending?"

• Businesses can't really get away with this, can they?

• Who are the victims of these scams?

• How long has this been going on?

• Why does my mortgage keep getting sold?

• Do government agencies know about this?

• What's being done to try and stop it?

• What can I do to help educate consumers and elected officials?

I need help!

• They're already coming after my home, what can I do?

• Wouldn't it be easier just to let them take the property?

• I have my cancelled checks, can they still foreclose?

• I have missed a payment or have made a payment late, what might happen?

• Can I get legal advice here?

• Should I contact a Foreclosure assistance company for help?

About msfraud.org and this site:

Who is this site for?

Anyone interested, involved in, curious about, or wanting to work to help end this malicious crime. Everyone is welcome! Even people from the lending industries that might disagree with what they see here, are welcome to come and explain their side of an issue in The Forum.

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Who built this site?

A collection of victims who needed a place to share information and support with others scammed by mortgage servicers. After putting this site together, we will probably never take on a web-site project again! We have been given deep insight into the meaning of the phrase: "It's alive!"

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Why not focus on one company?

As you can see from the Servicer's page, this is a much larger issue than one rogue operator. Pressuring only one company when this is an industry-wide problem won't solve anything in the long run.

When a company gets too much negative publicity, the law allows them start up somewhere else under a different name. Look no further than Bank of America to evidence what happens when the fire gets too hot. The same people just started somewhere else under a different name[s]. You won't get very far fixing one flat tire when all the others are flat.

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Can this site be shut down?

Not permanently! Sure, like all web sites, there may be technical glitches from time to time, but unless the hosting company completely abandons their Terms of Service and knuckles under to the racketeers we're fighting, the site will be here almost every minute of every day.

We're not going away. We can't be bought, sold, retired, deported or threatened into abandoning the issue.

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Are there memberships or fees?

No - We've probably all had it up to here with fees. At some point in the future, if we start seeing rampant abuse of the forum, we may have to start some kind of a registration process to weed-out troublemakers, but we're content to let things run with subtle, more behind-the-scenes moderating.

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Can you explain the MSF logo?

The diamond shape is as multi-faceted as the mortgage-servicing scheme. The "S" is wrapped around the "M" imitates the way your Servicer holds on to your Mortgage, by winding false information to your credit file to prevent you from refinancing. Most of the "F" is hidden from view, as has this scheme been for so long. We saw it, but getting others to believe us has been frustrating and extremely difficult.

One of our goals is that the website will serve as one of the keys to help put an end to the devastation we have suffered and prevent it from continuing. So, if you look at the logo under the "F" you will notice the word "Org" was designed to look like an old-fashioned KEY when the image is reduced.

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How did you pick the companies on that Servicer's page?

For those of us manipulated into this mess, it has been like a never-ending horror story. It has been suggested to many of us that our experiences would make a compelling, albeit disturbing, movie. That's why it was decided to list the servicer's page with a movie credit theme. (Plus, we think the animated gangster is cool!)

The names on the servicer's list are among the pretty well known financial industry "gang members." Their supporting cast includes companies that support or help to enable the scams.

We are concerned that this list is growing and the number of potential victims is rising exponentially. Adding names requires a lot of research but we will try to keep this list updated.

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How can I help?

This very-grassroots, chewing-gum and bailing-wire operation is self funding at present, so more than anything else for the time being, we need the active participation of anyone and everyone who wants to see the present financial services landscape change.

The best way to help is to make more and more people aware that the problem is real and that it devastates real people; real families. Neighbors, friends and relatives are, or can become victims.

Being on the forums to offer support, guidance and advice is very meaningful. You'll find a lot of messages that have resulted in a simple emotional lift to someone who needed it.

The next, but probably most important thing you can do is confront elected officials with the problem and let them know it is an issue that will have an important role in election year 2004.

Operating this website is very time-consuming and expensive. If you can possibly donate, any donation would be greatly appreciated. For now, you can send your donation to the address listed on the Flyers page.

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What is your privacy policy?

Barring a duly signed court order personally delivered by a legitimately sworn law enforcement official the webmasters aint sayin' nuthin' to nobody 'bout anybody. However, we do reserve the right to harass forum abusers with plague, pestilence disease and maybe even Voodoo dolls if identifying them to the community doesn't restrain them.

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What rules do you have for The Forum?

This is probably one of the most unregulated forums you're going to encounter. We have a kind of self-policing attitude toward such things because we believe most, if not all of the people who come to this site are adults. The fact is, most of the people who are going to post are victims of a scam, so it should operate as a support group instead of a political, social or religious debate forum.

In general, try to conduct yourself as if you were among a group of friends and acquaintances. You might have private disagreements with some people, but unless you were incredibly rude or wanted to hurt someone in front of everyone, you'd keep those kinds of things to yourself.

As someone's late Grandmother used to say, "Mind your manners."

If you believe someone has done something that you feel is so awful that you'd punch them in the nose if you got the chance, step away from the computer, take a break and then drop a note to moderator@msfraud.org if you still feel the person should be flogged and keel-hauled. We may or may not do anything, but that break may help your blood pressure.

Due to the volatility of this issue and the documented retaliatory actions of some servicers, it is suggested that you NOT use your full name, address, phone number or your normal email address when posting messages. And don't reveal anything that they could use to connect you to your account.

We cannot be responsible for what might happen people who reveal personal information. Do so at your own risk. The Internet can be a strange place. Please use your own judgment.

If you've inadvertently put something up that you want removed, we may be able to remove the entire message, or we can edit the content for you.

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Who makes the rules and who moderates The Forum?

We ask that you adhere to the rules of commonsense. The Forum is provided free of charge so people can communicate with others, share information, ideas and support others faced with having their life destroyed by one, if not the lowest form of corporate corruption.

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Isn't this the same thing as "predatory lending?"

No. Think of "predatory lending" as a lender-originated scam that takes place when you obtain a loan, while the loan servicing scam as something that is used after a mortgage is set up and then sold to a servicer.

"Predatory Lending" does contain some of the same elements such as fraud, extortion, racketeering, deceit and deception, etc., but predatory lenders typically try to entice people into buying a home or remodeling your existing home when they know you cannot afford it. In order for this scheme to work, they help create the illusion that you can have "the home of your dreams" if you borrow money.

When you realize you have been lied to and cannot keep up with the high interest and fees, they take your home and the process starts all over again with the next victim. The elderly, the uneducated and poor people are the most common targets and there is a lot of regulatory and legislative attention being given to that issue/.

In the mortgage servicing industry, we have some servicers who utilize a highly developed and proven system of generating large amounts of revenue that they aren't entitled to, and even taking houses that have been owned for years and can involve a substantial amount of equity.

It begins with things like adding an unsubstantiated fee here and there for services you have never heard of, and/or late fees for payments you actually made on time. If you attempt to dispute these charges to you account, they may go to the next level by having a "collection attorney" or an outside law firm start acceleration procedures and you will be expected to pay for that too. Now the fees rapidly multiply like a virus and in a very short period, you "allegedly" owe thousands! What did you do wrong? Nothing!

You have no say in who services your mortgage and you just happened to end up with a company operating this well crafted system of racketeering and extortion.

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Businesses can't really get away with this, can they?

To believe corruption doesn't take place in American business is naive, and you have to consider the size and complexity of the lending, insurance and investing industries. There are hundreds of thousands of people involved in a multi-faceted group of industries. With that many people involved and that much money to be made, there will be corruption. Even if 99.9% of the executives, managers and employees are honest, loyal, law-abiding and dedicated, that leaves thousands of others to engage in all kinds of corruption.

It's a disease in the American business climate that few are willing to take the necessary steps to cure, especially in the financial services sector. Insurance companies and lenders have the financial resources to keep Congress and the regulatory bodies looking the other way.

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Who are the victims of this scam?

In short, anyone with a mortgage loan. Loans today are made and then sold as securities. It is a huge and complex business and as with all businesses, there are sound, well run and ethical players and there are those who will use their knowledge and cunning to take advantage of people.

Almost any mortgage today can be sold. The rights to service it can be sold. The company doing the servicing can be purchased (Fairbanks as an example, grew rapidly by buying other servicing companies and the portfolios of loans they were servicing). Servicers can go out of business. Lenders can go bankrupt and sell the servicing rights of some of their loans.

If you have followed the saga of this issue for a long time, you'll find people from all walks of life have become victims. But in the majority of cases, the victim either does not have the financial resources to fight the servicer and their foreclosure-mill attorney firms.

Like all scams, the perpetrators look for the easiest, fastest and largest opportunities. That translates to people who:

q Don't understand the mortgage documents, the laws and regulations or their rights.

q Are easily intimidated over the phone.

q Have enough other credit flaws to make putting false late payment data into the credit bureaus plausible.

q Have equity in their home that can be recaptured into the loan principal.

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How long has this been going on?

The roots of mortgage servicing fraud go back to the 1980's. The real scams got their start when the lending industry convinced Congress to do away with usury laws. They wanted to make high-interest rate loans to supposedly more "risky" borrowers that could be secured with real property and then remarketed as securities. Fannie Mae was doing that function but their regulations wouldn't allow them to handle large or more risky loans, and the lending industry saw a hugely profitable opportunity in the so-called "sub-prime" market.

When it became difficult for ordinary lenders to deal with what it takes to service those kinds of loans, specialty firms cropped up that bought the servicing rights.

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Why does my mortgage keep getting sold?

The servicer buys the servicing rights to portfolios of loans. The servicing agreements run for a period of time, and if the "owner" of the portfolio wants another servicer or the agreement allows the servicer to sell the rights they can do that.

Servicers are paid a few hundredths of a percent of the payments on loans to service them. They can augment their income by charging the borrower for everything they do as long as the terms of the loan allow it. If that isn't enough, they get creative.

A portfolio of loans ages - most loans never reach maturity; people sell houses or refinance all the time. That reduces the value of the portfolio and the bond investments behind it.

If a servicer can keep your credit score low enough, you won't be able to refinance which adds to the value of the loan because you're going to be kept out of refinancing as long as you have a couple or more payments late.

That's part of how the game is played. They analyze very carefully and try to predict the behavior of loans to measure their value.

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Do government agencies know about this?

You can bet your Deed and Trust they do. Currently, there are investigations being conducted by several government agencies, including the FTC and HUD as well as several state Attorneys General. Other regulatory officials, consumer advocates and class-action law firms are involved. We are awaiting the results and with an election year coming up, we feel now is a good time to insist on change. This issue presents an enormous opportunity for an elected official to stand out above the rest by getting involved with this issue and ending the corruption in the lending industry.

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What's being done to stop it?

That depends on who you believe, but the simple answer is "not enough." The lending industry still persists in denial, attempting to deflect attention away from loan servicing as something that only affects a tiny minority of borrowers.

The most notable of the formal FTC and HUD investigations into Fairbanks Capital have been dragging on for over a year, which only demonstrates the kind of power the industry wields in Washington. And the likelihood of any prosecution for the executives that actually orchestrate these scams is slim. For some reason, if you're an executive you have some kind of "get-out-of-jail-free card" when it comes to regulator-driven investigations.

Because the regulators are apparently unwilling to really tackle the issue the primary route to action has been coming from civil cases, including several class-action suits.

But the courts have a poor track record in individual cases. Because of the deceptive use of the "sub-prime" label, it is commonly assumed that the homeowner is the one at fault. Until the courts clearly understand that yes, there are innocent people nationwide losing their homes to a network of corrupt servicers, victims will be continue to be effectively typecast as nothing more that deadbeats. When a case involves a powerful corporation versus one homeowner; the courts assume -- or are persuaded to assume -- the corporation is just protecting their interest; and the victim is just whining.

Far too many in Congress and the Senate are apparently listening more to the lobbyists than they are to the victims, so there is a small window of opportunity opening up in the 2004 election year.

We have a long way to go, but at least we have started.

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What can I do to help educate consumers and elected officials?

In short - spread the word! Start by emailing this web site to your list of contacts!

We have a Flyers/Mailers section where you can download informational flyers, handouts, fax pages and even bumper stickers. Now that this site is up and will eventually start appearing in search engines, the word will continue to spread, and that really is where the solution lies. People have to be made aware of the problem and then those who are willing to do something about it will start to confront the legislators for reform of the financial services industry.

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They're already coming after my home. What can I do?

First off, take a minute to catch your breath, try to relax a bit and start reading. One of the things they take advantage of is the ignorance of the borrower!

Start by going to the Flyers page on this site and read the "Do it Yourself Owl Hunting" guide. (The poster-child for the loan-servicing scam is Fairbanks Capital, and up until the middle of 2003, they owl was a part of their logo!).

Then join the others in the forum. There are a number of people there with significant experience and while no one can be your attorney or give you legal advice, there are people who have found answers.

If you can, find an aggressive, bare-knuckles, take-no-prisoners attorney who will not only believe you but will hang on through the torrent of nonsense that will probably come your way if you file a case against them.

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Wouldn't it be easier to just let them take the property?

It might be. If you do, you become one of the people your servicer talks about when they say: "That one mailed in the keys."

The attitude of many of the perpetrators is alarming! If you hadn't witnessed it first hand you, wouldn't believe it. They actually believe they're so powerful they can steal homes. To quote one -- "People walk away and let us take it."

All of us may become victimized at one time or another, but when faced with such an egregious crime as this, you MUST say to yourself:

"This is still the United States of America, and nobody is going to steal my home!"

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I have my cancelled checks, can they still foreclose?

Absolutely. They can manipulate your account to indicate whatever they like.

Many victims can demonstrate all payments were tendered in strict accordance to the loan documents. But unless you formally challenge any legal action they bring against you, your "proof" doesn't exist and the wheels keep turning to the foreclosure sale.

Even then, unless your attorney is determined and aggressive, it may not bring an end to their scheme.

True story. To save her home from illegal foreclosure, one homeowner was forced to file Chapter 13 bankruptcy. Shortly after the bankruptcy was approved, she received a call from her servicer explaining if she would let them out of the terms of the bankruptcy court's agreement, they would help her refinance with another lender and let her go. Shortly after she agreed, EMC Mortgage illegally took her home including her $55,000.00 equity.

And once you understand how easily one judge can be manipulated by the armies of attorneys Corporate America can bring to bear, you will understand that in some cases it doesn't matter how right you are, how many laws were broken or how much "proof" you have. Unethical? Absolutely. But are you really that surprised?

Today, newscasts are confirming that American corporations have become the petri-dish for the cultivation of abhorrent and rapacious behavior.

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I have missed a payment or have made a payment late, what might happen?

It really depends on the servicer, but if they are operating a scam, you have become the perfect target when you miss a payment every once in a while over the life of your loan. They have industry-backed "proof" from the credit bureaus that you are a problem payer. The credit bureaus will help them with data that you can't get. They will find information about you that you never even knew was being collected. That will haunt you in a court even where you can show they were responsible for not handling some payments correctly or adding unexplainable fees.

Judges in this country just roll over and play dead whenever a lender trots out their victim's somehow infallible credit data history.

If you really have missed payment[s] or are repeatedly late, you're in serious trouble, especially if you have significant equity in the property. The sad fact is, if you've missed some payments, you're going to need to consult a bankruptcy attorney if the scam operators are really coming after you and you want to try and save your home.

Keep in mind late fees are not mandatory.

There are servicers out there who appreciate their customers and realize they wouldn’t have a business without them. We know of one borrower who is consistently late and has never been charged a late fee. (He doesn’t know his servicer is listed on our Fraudster page.)

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Can I get legal advice here?

Not at this time. In the Legal section, you will be able to find information we have compiled from government agencies and legal databases including links to websites where you can conduct your own research. The Legal section also contains a list of law firms representing borrowers victimized by this scam.

As the disclaimer at the top of this page points out, you should get competent legal advice from an attorney when trying to deal with this situation.

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Should I contact a Foreclosure assistance company for help?

Always research the company first. People facing the devastating prospect of losing their home are easy targets for additional scams. Please read this story before making your final decision. http://www.thewbalchannel.com/11investigates/2896134/detail.html

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