Mortgage Servicing Shams: The “Baby Faces” and the “Heels”
In the realm of professional wrestling, there is a clear division when it comes to the good guy versus the bad guy, or the “baby faces” versus “the heels,” as those familiar with the industry would phrase it.
Interestingly, New York Filmmaker Joel Sucher recently made the connection between this world and the one inhabited by mortgage servicers.
Our Miami foreclosure lawyers realize that on the surface, it may seem the two have very little in common. But where we begin to see similarities, as Sucher deftly pointed out, is with regard to a practice called dual tracking.
This is the process whereby the borrower is working in good faith with the customer service representatives to do everything they can to save their home. They’re sending in reams of documents, they’re digging up every financial statement and they’re answering every call – all in the hopes of reaching a loan modification that will allow them an affordable mortgage payment that they can manage in order to hang onto their house.
But meanwhile, that same mortgage servicing firm is employing people at the back end to undercut those efforts by preparing foreclosure action.
The customer service agents are the “baby faces.” The backroom workers are the “heels.”
While the borrower this whole time has thought he was working with the bank to reach a mutually beneficial solution, his feet are suddenly yanked out from underneath him. He’s slammed into the mat with a notice of intent to accelerate. In plain English, that notice means you are expected to fork over the full amount of your loan, any interest you owe on it and any penalties. Oh, you can’t pay that? Here’s the door.
Rules established by the 2010 Dodd-Frank Act and later by the U.S. Consumer Financial Protection Bureau aim to significantly limit a mortgage servicer’s ability to foreclose on a homeowner while that same servicer is simultaneously working to negotiate a loan modification.
However, the rules stop short of expressly banning dual-tracking, so it does still happen.
The new rules are supposed to limit the degree to which servicers can propel forward the foreclosure process until the borrower has had every opportunity to work out a loan modification.
Of course, banks have long been known for bending or even breaking the rules. Why do you think we’ve had this ongoing spate of multibillion-dollar settlements in recent years? Yet, many of them still haven’t learned.
Dual-tracking is far from the only mortgage service scam we’re seeing these days. To name a few:
- The “Western Union” scam. Servicer representatives press homeowners to make payments using a convenience fee option, which charges the borrower an additional $10 to $20 per payment, allowing banks to rake in millions more annually. Homeowners get virtually nothing for this.
- The “property inspection” scam. An outside contractor will conduct a “drive-by” of the home. They look to make sure it’s still there and note the general condition of the home. From this, they formulate a Broker Price Opinion, which allows the bank to tack on about $12 extra a month to the borrower’s statement if the place looks good. But if you’re home is in poor shape, don’t expect a break.
- The “forced place insurance” scam. Our Miami foreclosure lawyers have discussed this on numerous occasions. Basically, if a borrower allows a lapse in homeowner’s insurance coverage, the servicer can force you into a policy – one that is usually ten times higher than it would have been otherwise. A lot of times, it’s later discovered there were errors, and the original coverage hadn’t actually lapsed in the first place.
If you have fallen prey to your mortgage company’s dirty tricks, call our experienced Miami foreclosure lawyers today.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.