Mortgage Servicer Abuse Faces Federal and State Investigation

by San Antonio Attorney

NEW YORK – Another mortgage service abuse against homeowners in New York was added to consumer defense attorney Linda Tirelli’s increasing files of abuses on Wednesday.

Investigations of federal and state regulators uncovered improper practices of big banks and servicers, which are commonly one and the same. A servicer was found to be overcharging by $2,700 for property inspection of a homeowner in foreclosure which should only cost $9.60.

The leading servicers and lenders in the U.S. are Citibank, Wells Fargo, Citibank, JPMorgan Chase, and Bank of America, with total of 54 percent in mortgage servicing market share and 61 percent of loan originations in the first quarter of 2011.

When Tirelli asked for invoices, as required by federal bankruptcy law, the bank’s attorney said that they will be sent only when she starts the litigation.

According to Tirelli, this is a form of abuse because it results in unsubstantiated claims.

Unsubstantiated claim is not the only abusive practice that servicer takes. Junk fees, misapplied or rejected payments, attorney’s fees, and dual tracking are the most frequent are the most frequent practices of servicer.

Significant proofs of these abuses have existed for many years now, and a huge number of homeowners in America have experienced foreclosures which are questionable, or perhaps unlawful, as a result of these abuses.

The Center for Responsible Lending’s spokesperson, and also the one who conducted the study, said that, “Many foreclosures didn’t follow the rule of law, and you can’t take private property away from someone in this country without due process.”

In New York, the majority of 40,000 families in foreclosure have difficulty with no legal assistance.

The office of US Trustee is currently conducting investigations on abusive servicing practices. According to reports, five major banks were audited and accused of fraud in foreclosures process by the inspector general of the Department of Housing and Urban Development.

The Attorney General of the State of New York Eric Schneiderman has also said last week that he is probing Morgan Stanley, Goldman Sachs, and Bank of America’s practices on mortgage securitization.

San Antonio Bankruptcy, is where more interesting news can be found

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