6 Tricks which Banks Use to Drive Homeowners Into Foreclosure!
HUH? BANKS WANT US TO FAIL?
YEP! WHERE WERE YOU for the LAST DECADE? Banks have become just mortgage servicing agents.
Foreclosure of your home is their new business model. Protect your home by learning about the tricks they play.
The Banks' Business Model is Foreclosing on Homeowners!
Most homeowners are unaware that their mortgage banks make more money
from foreclosure than actual payment. Mortgage banks give as few
modifications as possible and comply minimally with statutes put in
place to protect borrowers, all while employing tricks to “cash in” on
homeowners’ defaults, pushing them to foreclosure. The banks take the
risk of litigation because few people sue, but getting legal assistance
as soon as possible can make the difference between homeowners asserting
their rights or losing their homes while being bulldozed by the bank.
Securitization is the reason banks want homeowners to foreclose. When a
bank assigns the risk of a loan to the investors of a securitized trust,
the “bank” is no longer a traditional bank that gets the benefit when
mortgage payments are made. Instead, the bank has become a servicer that
actually benefits disproportionately from foreclosure on a homeowner’s
When foreclosure becomes a possibility, like when a borrower misses a
payment or asks for a modification, the banks seize the opportunity for
increased profit by foreclosure. According to Susan M. Murphy, Founding
Member and Lead Attorney of Los Angeles based Advocate Legal, that is
also when the bank will start to employ the following tricks:
Bank Trick #1: Refusing Payments The bank refuses the check a homeowner
sends in. The bank may offer a reason (for example, there’s a mistake on
the account) or it might offer no explanation at all. The bank may even
offer the homeowner a loan modification. The bank does this to delay the
homeowner from immediately contacting an attorney to pursue a breach of
Alternately, the bank may take trial payments in an effort to further
delay the homeowner until the arrears (also known as the forbearance)
becomes so great that the homeowner is ineligible for a loan
modification or unable to repay the debt.
Eventually, the servicer combines this trick with other tricks, such as
changing servicers, to draw the homeowner further into default.
Bank Trick #2: Switching Services During Modification A homeowner gets a
loan modification with one servicer and makes trial payments. The
servicer advises the homeowner that it is switching servicing rights to
The new servicer claims to know nothing about the modification and
delays the homeowner for months waiting to get the relevant “paperwork.”
No matter how many times the homeowner sends proof of the modification,
the new servicer refuses to honor it.
It is a violation of California law to not honor a modification from a
prior servicer but servicers know that most people will not pursue
Bank Trick #3: Breaching a Modification Contract
Homeowner gets a loan modification that includes a balloon payment of, for example,
$50,000 after 20 years. After paying on this loan modification for a
year and a half, the homeowner gets a new modification in the mail from
the same servicer with a balloon payment of $150,000. No matter how many
times the borrower calls the servicer, or tries to forward the existing
modification, the agent will respond with a fixed script that does not
acknowledge the prior modification but only talks about the new one. The
confused borrower will feel like he or she is talking to a robot (on a
recorded line, being monitored by a supervisor). Eventually, if the
borrower does not sign and execute the new modification, the bank will
begin to refuse their payments on the old modification.
The servicer will also create a paper trail that tells a different story
than what is actually happening. If the bank is trying to stick a
borrower with a new modification, the paper trail will show the borrower
is refusing the modification and mention nothing about the old one.
Eventually, the servicer will stop accepting payments unless the
homeowner acquiesces to the new modification.
Bank Trick #4: Extra Fees & Escrow Accounts
The homeowner receives a bill for extra fees out of nowhere so that the
mortgage payment becomes something the homeowner suddenly can’t afford.
The servicer refuses to accept any “partial payment.” After that, the
bank continues adding on fees each month, increasing the amount the
borrower has to pay to reinstate. They may offer the homeowner a loan
modification as a distraction to trick the homeowner into a longer
default. Because the borrower thinks they are getting a modification,
they will spend the money they would have put towards their mortgage and
be unprepared to pay their arrears if the modification falls through, as
it most likely will.
The servicer does all this while telling the borrower they are there to
The servicer may pay homeowner taxes early and then accuse the homeowner
of not paying them. The servicer may point to a clause in the mortgage
that says if the homeowner doesn’t pay the taxes, they can raise the
interest rate. They may begin charging the homeowner for forced place
insurance at a high rate even though the homeowner already has
insurance. This is something the homeowner only finds out after-the-fact
when trying to pay property taxes.
Bank Trick #5: False Notices
In a non-judicial foreclosure state, such as California, foreclosure is
done by recorded notice. The Notice of Default states the amount of
arrears that a homeowner must pay back to reinstate the loan.
Servicers uniformly overstate this amount by up to $20,000, which serves
two purposes: (1) It scares borrowers with an inflated amount of arrears
that they believe they can’t cure; and (2) It creates a paper trail for
the bank so they can claim more money from investors.
Bank Trick #6: Multiple Modifications
The Homeowner Bill of Rights (HBOR) is recent California law that has
protection built in for borrowers that apply for a loan modification.
The bank must respond to the application with a denial or approval
within a definite period. A denial must be in writing and must inform
the borrower of the right to appeal. The bank cannot “dual track” a
borrower by posting Notices of Foreclosure and Trustee’s Sale while
reviewing the borrower for a modification.
There are big penalties for “dual tracking” by the bank, but only if it
is the borrower’s first time applying. This is why a servicer will often
deny a modification over the phone or encourage a borrower to apply
again. Once a borrower becomes a serial modifier, the bank can dual
track the borrower all it wants without statutory penalties. And, it
Banks use these tricks because they prefer foreclosure to loan
modification. Murphy, whose practice focuses on litigation against
lenders and servicers, goes on to note that servicers benefit more from
foreclosure than from modification because of something called “creaming
the debt.” If the servicers modify the loan, their penalties and fees
might not get paid to them. When they foreclose, they get their
penalties first, before the investors– which is the “creaming.”
Foreclosure is clearly the fattest pot of gold possible and it’s for
this reason foreclosure is the bank’s primary goal.
If a homeowner spots any of the above tricks, the best thing to do is
immediately seek legal assistance in order to avoid the situation from
getting any worse. AND IT CAN GET WORSE, SEE PARAGRAPH BELOW!
Our POSTER, ANITA SANDS HERNANDEZ ( astrology at earthlink dot net. 15$ a NATAL chart, been doing stars 63 years,) ADDS this horrific fact: BANKS TODAY also want you to make tiny errors with your bank accounts which will add hundreds of dollars of penalties within a month's time. With 330 million people in AMERICA, that adds billions of bloody, pirate booty to their treasure chests. Here's the one you will run into: BOUNCE a check, and be even FIVE DOLLARS UNDER, they fine you a big amount. HERE IS WHAT IS WORSE. You, of course, run to the bank to put in money to cover that MINUS FIVE BUCKS condition. Even when you put in a big amount of MONEY or your next SOCIAL SECURITY CHECK ARRIVES, EVEN IF IT brings you up to HIGH WATER PLENTY, The WATER TURNED TO ICE! They have already FROZEN YOUR account! The next checks that you write will all bounce, incurring penalties at your landlord's bank, phone company, cable, grocery store, everywhere. THE SHARKS MAKE BANK, gnaw you up like a sea bass while YOU WILL NOT EAT MEAT FOR SEVERAL MONTHS TIME. Your LANDLORD may demand cashier's checks from now on which mean MONTHLY trips to the bank, (WHO OVER 70 has a car ) Means waiting in line, getting huge amt cash, going to the post office for money orders, For me at nearly age 80, with no car, it means BIKING to BANK AND P.O with a bad aorta needing valve replacement but BIKING SIX MILES WITH NO HELMET or muscles or coordination.
Written by Carla Faraldo and published by NewsWire, April
This entry was posted in The Economic Decline on April 23, 2015 by The
<===BACK TO "HOW NOT TO GET SNOOKERED BY THE SYSTEM"
<==BACK TO "THE CRIMES OF EMPIRE"