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View Diary: NY Atty. Gen. Schneiderman LOVES Today's Mortgage Fraud Deal. UPDATED x3 Liz Warren Likes it Too! (261 comments)

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  •  The situation you are posting is not common. (4+ / 0-)

    High cost forced placed insurance, ridiculously high fees for drive by appraisals, misapplied payments, and all the rest of the abusive fees did occur-- but generally not to people who were current on their mortgages. It was typically only when people would miss payments that they would get caught in this vortex of fees.

    Some homeowners were apparently told (or thought they were told) by their banks to default in order to qualify for a modifications.   These homeowners who were actually told by their banks to default have a good case that they were financially damaged, and their lawsuits against the banks can proceed.   But in many cases in which borrowers in good standing were told to default on their mortgages to get a modification, it was in fact not the bank who told them this, but some third party scam artist who sold them on the idea that they could get their payment reduced.  In many cases like this, the bank told correctly them that they did not qualify for a mod, but the homeowner was greedy and did not want to hear that, and they unfortunately turned to the third party scam artist who told them what they wanted to hear.  

    •  You say that the abuses only occurred to people (0+ / 0-)

      already in default - based on what? Your opinion that this is the truth? I know that it is not the truth by reading and following this issue closely for years now.

      Probably 20 minutes of Googling could show you how much in error you are:

      NYT- How to Handle Force Placed Insurance

      That article is from last month replete with examples of current homeowners subjected to force placed insurance.

      You might give this a look as well, also filled with examples of current homeowners who became the victims as their servicers ran roughshod over them.

      Senate Testimony from Attorney from The national Consumer Law Center

      I actually don't even understanding the point you seem to be trying to make - that only homeowners in default were victimized by abusive fees - does that somehow make it less horrible in your eyes? It was abusive and illegal practice, regardless of whether the homeowner was in the current or default status.

      “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

      by Phoebe Loosinhouse on Fri Feb 10, 2012 at 09:04:45 AM PST

      [ Parent ]

      •  Allow me to amend my comment. (0+ / 0-)

        It was typically only when people would miss payments or when they were otherwise in default that they would get caught in this vortex of fees.

        Insuring your home is a condition of a mortgage.  If you don't keep the insurance requred in the mortgage contract, you are in default on the terms of your mortgage, and yes, you will then likely get caught in the vortex of fees.

        Fortunately, most people who have a mortgage understand that they must insure their home, and so they carry the required insurance themselves.  If you don't, it is true: your bank will get the insurance for you, and charge you some outrageous amount for it.  

        •  Why not try reading the articles I linked to? (0+ / 0-)

          Particularly the NYT one.

          You don't seem to understand the concept of force placed insurance as it applies to the concept of mortgage servicer abuse.

          Yes, we all know you have to keep your house insured if you have a mortgage.

          “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

          by Phoebe Loosinhouse on Fri Feb 10, 2012 at 09:33:17 AM PST

          [ Parent ]

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