Are Mortgage Company's Stealing Your Money?

Just finished drafting a lawsuit today for woman, I'll call her Mary Lou. She's a single woman who lost one of her two jobs she needed to make ends meet and got behind on her mortgage. She contacted her mortgage company and asked if they could do a modification. They said "no problem" we'll just roll the past due payments into the modified loan. So, she filled out the loan applicaton and sent them 27 pages of documents. A few days later she confirmed with them that they'd received the documents. Nothing happened for 45 days so she contacted them again and ended up talking to their India office and was told they couldn't find the application. She faxed it again and confirmed with them the next day that they got it. They told her it would take 30 more days to process. In the meantime she's getting farther behind on her mortgage.

Forty five days later she contacts them and she gets the same story---we can't find your paperwork. So, she faxes them 37 pages again. This time they say it will take 60 days to process. She confirms they got the fax and waits. A month later she contacts them again and can't get through to a person so she leaves several messages. Several weeks later she finally gets a later acknowledging her request for a modification and assuring her that it will be processed expeditiously.

There weeks later she tries to contact them again and they direct her to another agent in India. After many attempts she finally talks to a woman and is told they need more documentation. The client has trouble finding these documents but manages to send them in two weeks later. In the meantime she receives an acelleration letter and notice of foreclosure from a lawfirm. She tries to call the mortgage servicer to see what's up but only gets messages. A few weeks later she breathes a sigh of relief when she gets a letter from the mortgaging servicer assuring her everything is okay and they won't foreclose.

On the first Tuesday of the following month the mortage company forecloses and the home she's lived in for 23 years is sold for $50,000 more than the note. Mary Lou doesn't find out about it until a man walks up with eviction papers---she has 3 days to vacate!

Devastated, Mary Lou moves out to an apartment and has to trash two thirds of her belongings because they won't fit into her small apartment. She's broke, depressed, angry, humilitated and can't focus on anything. Her life has been ruined and she doesn't feel like even getting off the sofa.

What she doesn't realize, in addition to all the horrible injustices that have been inflicted on her, is that she's just been ripped off for $50,000. The lender had a duty to write her a check for the money they received from the foreclosure in excess of the loan principle plus the cost of foreclosure, but instead someone pocketed her money!

I wish this were an uncommon experience, but it happens every day, and it's not always simply gross incompetence, sometimes, if not many times,it's intentional.

Beware of Debt Negotiators

With so many Americans out of work and finding it impossible to keep up with their credit card bills, there has been a proliferation of debt negotiators out peddling their services.

Some of these debt negotiators are honest and sincere but many are not. Either way it is highly unlikely that they will be able to formulate a workable plan for many reasons. First if a consumer can't afford the minimum payments on his credit cards they won't have cash for discounted settlements nor will they be able to spare any income for long term payouts. Often debt negotiators will be overly optimistic and lead consumers into a plan that is totally unrealistic and only exacerbates their perilous situation.

The truth is many of these debt negotiators care little about the consumers they claim to be helping. Some are interested only in the nice fat fee they ask for upfront, others are funded by the credit card industry itself, and others have unrealistic expectations from the consumers they represent.

In my experience when you find yourself buried in debt there are only three options. One is to drastically increase your income. This is possible by getting a better job or taking on a second one. This isn't usually a realistic solution. A second option is to quit paying the debt and hiding from creditors. Many consumers take this second option, however, it isn't very satisfactory either as creditors will try to make their lives a living hell. The only sensible option for most is bankruptcy.

Many people delay filing bankruptcy hoping for a miracle. This delay usually only makes matters worse and subjects them to unnecessary stress and anxiety. Long term stress of this type can result in divorce and even suicide.

Bottom line, if a consumer is overhead in debt they should avoid debt negotiators and file bankruptcy without delay before their financial predicament scars them for life.