The Sharks Are Circling

I'm hot on the trail of a story that's making my blood boil. Mortgage servicers, the banks that handle the investments of mortgage lenders, are acting like collection agencies.

You've never missed a payment on your house. You've never even been late. But you do have an application in for a loan modification. Are you a target?

If your loan servicer is IndyMac/OneWest, I was told that you and everyone else whose loan is serviced by them can now expect a phone call within a day or two after the first of the month.

"When can we expect that payment? How will you be making it? Will you be sending a check or paying online? Would you like to pay now by credit card? Can I please make a note of when you expect to pay it?"

The money isn't due yet. There's a two week grace period and you're well within it. But the phone calls will come every month and if you ask why - is it because you've applied for a loan modification?"

"Oh no - it's not just you. We're calling everyone."

Really.

I got in touch with IndyMac/OneWest's spokesperson - or I should say I got in touch with her secretary. How do you reach her? It's not easy. The website doesn't offer any options except for a circular route through an automated system if you don't know the name of the person you want. And since OneWest is currently trying to hire a communications person to replace the last one (who went to Fannie Mae), what name can you use? I reverted to research - tracking down the name of a corporate VP through professional websites and asking her to get me in touch. It worked. But I didn't get a call back. Yet.

But officials at a local foreclosure counseling service say they're hearing this a lot. And it's not just mortgages. If you've got a large outstanding debt of any type - mortgage or credit card - companies are apparently being far more aggressive in trying to ensure payment.

The phone calls are regular and they're intimidating.
If you hang up on them today, they'll call back tomorrow.

And remember, these are calls to people who pay their bills on time.

It's pretty nasty, especially since these servicers are the ones that we now know are holding up processing of loan modification applications because their fees are better if borrowers default.

**UPDATE** Spoke with OneWest today - they are looking into it, but these phone calls were news to the person I spoke with. Curiouser and curiouser.



http://www.publicbroadcasting.net/wamc/news.newsmain/article/2706/0/1539626/WAMC.News/Foreclosures.Rising..Loan.Servicers.Drag.Their.Feet

Things Are Better - So It's Getting Tougher To Get Help

This is anecdotal evidence, but I have no reason to doubt it as I heard it from two independent sources.

The economy, in the opinion of the banking industry, is starting to improve. And that means the big lenders are resisting cutting any deals in an effort to head off foreclosures.

Here's what I heard:

An attorney who has dealt with several of the large lenders, including the former IndyMac, says he's not taking on any more loan modification or refinancing cases. He has two reasons. First, it was a nightmare. He spent hours on the phone with little result. Second, lenders aren't working with the borrowers anymore.

"They're seeing things improve, and they're not willing to make any deals now. They're not even agreeing to short sales. If a customer manages to sell his house but it's worth less than the mortgage, they're letting the sale go through but demanding the customer make up the difference. Loan modifications? They won't even talk about it.

Wasn't that mandated for banks that took federal bailout money? Aren't the rest of them being strongly encouraged to do it?

Another person I spoke with used to be a mortgage broker. She knows the housing mess first hand - her own house was on the market for more than two years and she nearly filed for bankruptcy. She's finally managed to sell for less than she paid for it. In her opinion, the biggest mistake she made was trying for so long to keep up with her payments. Now that she's at the end of the process, she says she could have saved herself a lot of worry and saved a lot of money if she'd just defaulted. The end result would have been the same. She saved her credit, but she's not sure it was worth it.

So this is how the big banks are going to play it? Cry for help, beg for money, agree to do whatever they can to help their customers, then play hardball the second they see an inkling of an economic upturn?

They should all be shut down. There's no sense of fairness, no acknowledgement that they were stupider on a much larger scale than any of their customers were, and no acceptance of the responsibility they agreed to when they took taxpayer money to stay afloat.

It's time for the peasants to fight back.