Antoine Morris
Exploiting Borrowers Amidst the Foreclosure Crisis
On Tuesday, May 6th, a Senate Judiciary subcommittee held a hearing on abusive practices perpetuated by mortgage lenders in the bankruptcy court system. Businesses and consumers often turn to bankruptcy courts as they liquidate their assets in an effort to workout reasonable payment plans with their creditors. For families on the brink of losing their homes, bankruptcy courts play a key role in allowing at-risk homeowners one last chance to keep their homes.
In recent months, however, some mortgage services such as Calabasas, California based Countrywide Financial Corporation have come under intense scrutiny for foreclosing homes prematurely only to pile on unnecessary and costly fees on borrowers during bankruptcy proceedings.
Steve Bailey, the Chief Executive for Loan Administration at Countrywide, however, disputed those allegations. In a prepared statement before the Senate Judiciary Committee’s Subcommittee on Administrative Oversight and the Courts, he said, "Countrywide is committed to helping our borrowers avoid foreclosure whenever they have a reasonable source of income and a desire to remain in the property."
He also claimed, "Recent media reports alleging that mortgage servicers are systematically charging excessive fees and using the bankruptcy process to push borrowers into foreclosure or abusing the process more generally are inaccurate." Bailey attributed any perceived abuses to no more than run of the mill "individual employee errors."
Countrywide's track record of overcharging borrowers facing foreclosure and during bankruptcy proceedings, however, suggests otherwise. One New Jersey couple who owned their home for the last 10 years were served with foreclosure papers by Countrywide and were inexplicably charged expensive flood insurance that they could not afford and did not need. It took months to resolve the error. Meanwhile, they fell behind on her mortgage payments.
In several other instances, the mortgage company has also been accused by attornerys representing borrowers and U.S. Trustees in bankruptcy courts of inflating overdue mortgage payments and fabricating documents to bolster their claims and collect more money in bankruptcy court.
Robin and John Atchley's experience with Countrywide seems to be emblematic of these very same abuses. In 2004, the Atchley's moved from a mobile home to what Robin Atchley described as her family's dream home in Waleska, Georgia. After securing a home loan from American Freedom Mortgage her mortgage was sold to Countrywide. During Mrs. Atchley's grieving period after her sister's death, she took unpaid leave from her job at the U.S. Postal Service. Soon afterwards, the Atchleys fell behind on their mortgage payments by about three months worth.
Apparently, that was enough for Countrywide to initiate foreclosure proceedings against the Georgia family and create what Atchely called a "tug of war" over her home. The Atchleys hoped the bankruptcy court would allow her and her husband to pay off her debts and keep their home. But the Atchley said all Countrywide wanted to do was " take advantage of our predicament and to profit from our struggle." In fact, at one point, Countrywide alleged that the Atchley's owed an extra $14,000 on her home loan and $2,250 for other unspecified fees.
Neither of those extra charges were substantiated once they were vigorously challenged by her attorney.
Katherine Porter, a bankruptcy law expert who has studied 1700 bankruptcy cases, told the Subcommittee that the Atchleys suffered an all too common fate. Porter said of the bankruptcy cases she researched "mortgage servicers disregard(ed) bankruptcy law" more than half the time.
Mortgage services frequently misapply payments during the bankruptcy case or fail to disclose post-bankruptcy attorneys fees and property inspection charges or simply not itemized their fees at all in an effort to overcharge borrowers. Porter contends that such a pattern of falsifying or withholding documentation demonstrates a deliberate attempt to manipulate a system intended to help those trying to avoid financial ruin.
An unpersuasive defense from Bailey of Countrywide's treatment of the borrowers like the Atchleys led Senator Chuck Schumer, chairman of the Subcommittee, to conclude "Companies know that the hapless homeowner is too poor, too unsophisticated or too overwhelmed to challenge often blatantly fraudulent demands for payment."
The Atchleys eventually lost their home and are currently living with other family members until they can save enough money to rent a place of their own.
Antoine Morris: Author Bio | Other Posts
Posted at 7:00 AM, May 08, 2008 in Economic Opportunity | Housing
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Comments
Hi,
This is really nice article as i got too much stuff to read.
I would love to visit again.
Thanks for the information.
===================
jack
Foreclosed Homes
Posted by: jack | November 7, 2008 08:52 AM
Recently, I decided I needed to get help from a loan modification program. I was down 4 months on my mortgage due to the loss of my income. After 23 years on my job, the company shut down leaving thousands of us out of work. I went to 21st Century Legal Services voted #1 in best loan modification company's located in Rancho Cucamonga California U.S.A., not knowing what to do. They went over my financial situation and decided to do a Wells Fargo loan modification. They helped me with my loan modification letter, and agreed on a great loan modification agreement. 21st Century Legal Services a law office warned me of the many scam rip-off telemarketers pretending to be providing loan modification services. I thank 21st Century Legal Services so much for saving my home. I hope my story encourages anyone in danger of losing their home to call 21st Century Legal Services or check their website out. Their phone number is 1-888-483-1748 and their website is www.21stcenturyremod.com check out their website and watch their commercial.
Good Luck To You All!!
-Sally Rose
Posted by: Sally Rose | March 12, 2009 07:25 PM
Do you know how to avoid foreclosure? Do you know to get some really great information on preventing foreclosures? I do when I lost my job and was faced with foreclosure I did not know what to do. I was so worried, but then a buddy of mine told me about a loan modification program that saved his home, the company is called 21st Century Legal Services located in Rancho Cucamonga California. So I decided to I should call them and see if they could save my home. The next day I called 21st Century Legal Services about a mortgage loan modification. 21st Century Legal Services has Mobile Notaries that came to my house and picked up my paperwork. They got a great loan modification agreement on my Wells Fargo loaan modification. I suggest anyone in danger of foreclosure call 21st Century Legal Servics at 1-888-483-1748, or check them out on the web at www.21stcenturyremod.com. If they could save my home they can save yours.
Posted by: Danny Baker | March 18, 2009 05:51 PM
Many many complaints about 21st Century Legal services. The Positive posts like the two here all are promotional ones by 21st Century. Read them Carefully you will see a similarity. Now the notaries they send to help with the paper work are reporting their payment checks are bouncing. (www.notaryrotary.com)
They are not registered with the California DRE as required.
Posted by: Garth | March 28, 2009 10:24 PM
How interesting 21st century legal services shows up on every blog. How did they get voted #1 in loan modification? Why aren't any of their legal team/advisors posted on their website? i.e. names, license info and contact numbers?
Posted by: Marie | April 22, 2009 03:56 AM
Why go somewhere that can be accomplished by the borrower, free counseling center or hometown lawyer?
How can 21st Century Guarantee rate reduction to 4%?
Mortgage rescue companies are unlicensed entities. Once you given them your money you are at their mercy.
If they are a law firm let's see Attorney names, licenses and Bar Membership.
Buyer Beware.
Posted by: John | June 24, 2009 06:50 PM
Beleive me these people are RIP OFF ARTISTS they will scam you big time. I am one of them Do not give them any checks at all. They have no license of there practice which should be on every peice of paperwork. l do not know if l will ever get my money back at all from them . They are dirt bags ...
Posted by: Sandra Wilson | July 8, 2009 09:47 AM
BEWARE FIDELITY NATIONAL LEGAL SERVICES - SCAM ARTISTS - FORMERLY 21st CENTURY LEGAL SERVICES - NOTARIES ALL OVER THE COUNTRY AGREE!
This is to update you that 21st Century Legal Services has just now changed their name to Fidelity National Legal Services. Presumably to avoid government oversight and to continue business as usual.
21st Century Legal Services (previous aka 21st Century Real Estate Investments and very recently morphing into Fidelity National Legal Services) is currently the subject of active scrutiny & legal action by State Attorneys General in California, Indiana, Ohio, Florida, Wisconsin, Arkansas & Mississippi. And likely under consideration by others.
To say nothing about the thousands of negative postings nationwide on the internet --
Rip-off Report, numerous state & local Better Business Bureaus, professional notary associations & news agencies -- to name a few.
HERE ARE 2 LINKS SHOWING WHAT THE NOTARIES ARE SAYING:
http://www.123notary.com/forum/topic.asp?TOPIC_ID=3187
http://www.notaryrotary.com/forums/searchresults.asp?id=&smsg=&requestid=08210319001&code=2DCD8F21CB8B5B23F17FC20B2D8B4032&forumid=1AAA00000003&display=0&format=threaded&forumname=General+Discussion&description=The+most+recent+50+search+results+for+%3Cb%3Etopics%3C%2Fb%3E+containing+the+phrase+%3Cb%3E%2221st+century+legal+services%22%3C%2Fb%3E.&keyword1=21st%20century%20legal%20services&msgnbr=&keyword2=&startdate=&enddate=&author=&optauthor=0&seldisplay=0
Please pass this on for the sake of distressed homeowners nationwide.
These are homeowners who may, or may not be responsible for their current predicament -- but nobody deserves to be kicked while their down.
Posted by: Patty | August 15, 2009 06:32 PM