Mortgage servicing woes
When the brouhaha over foreclosure "robo-signing" hit last fall, mortgage servicers said the bogus court documents were just minor deviations from the rules and didn't change the fact that borrowers were way behind on their payments.
But it's increasingly clear now that servicing problems aren't limited to foreclosure documentation or to people who aren't paying.
Consider, for instance, Lutherville doctor Anca Safta, whose servicer threatened to start foreclosure proceedings this spring even though she'd never missed a payment. The company wasn't crediting her account because of an error in its records.
Or consider the Massachusetts couple whose Florida retirement home -- paid for in cash -- was broken into and cleaned out by a servicer's contractor last year in a case of mixed-up addresses.
You can read more in Sunday's story about mistakes and misbehavior. But there was lots of interesting stuff I couldn't fit in the story, and it seemed a shame not to share. For instance:
Borrowers (and some number of mortgage-less victims of the foreclosure crisis) aren't the only ones with complaints. Increasingly the pension plans, investment funds and other investors that bought loans as mortgage-backed securities are making it clear that they're unhappy with their servicers, too.
"As difficult as it may be to believe, many of the most sophisticated investors were as victimized and abused by the servicers and their affiliates as were many consumers," said Chris J. Katopis, executive director of the Association of Mortgage Investors, in May testimony to a Senate banking subcommittee.
I'll be parceling some of the other interesting tidbits into blog posts this week. In the meantime, here's a video in which Safta explains some of the twists and turns in her situation. (You'll have to see the story for the rest -- when we chatted at her home, she had yet to get an explanation for what exactly had gone wrong.)