MORTGAGE SERVICE COMPANIES BLOCKING REAL ESTATE RECOVERY

July 9, 2009

You have to wonder what's going on and what these "Mortgage Service" companies are anticipating. Reports are that thousands of homeowners, who are unfortunate enough to have their mortgages serviced by (i.e., basically collect payments for an "investor") these blackholes, are being totally stonewalled when trying to resolve their defaulting loans.

These paper-shuffleing companies are largely staffed by low-level clerical employees who have no authority, ability or incentive to work with troubled homeowners. They are also apparently under orders from Management to "loose" or deny receipt of documents that homeowners are attempting to submit.

A typical example of these companies is Saxon Mortgage. A homeowner recently arranged for a "short sale" at a reasonable price, relative to current property values and the prospective buyer properly submitted the offer to Saxon Mortgage. For this type of sale, the actual "short sale" offer may require over 50 pages of documents. However, after 4 months and at least six attempts to submit the 50+ page offer, the buyer terminated the offer due to total frustration with Saxon. Saxon Mortgage repeatedly denied receiving the offer packages and it is next to impossible to ever speak to the same person at this company more than once. But as noted earlier, it really wouldn't matter since there's a reason for this behavior, and would you believe it - it's GREED!

The very same types who packaged and sold CDOs (packages of "toxic" mortgages, in most cases), many being "sold" to their own shell companies. Now, they've profited from the initial sale of the CDO, collected on the default insurance policy and now have the property back on their books, with little or no investment on their part.

How many of these companies have also received TARP funds? This would be close to triple-dipping on the same investment and still owning the property free and clear. Now, if they can only get the defaulting homeowner on the hook, they can realize nearly 4 times their original investment and still get to sell the foreclosed home. It's tough to explain, tougher to understand and, for that very reason, absolutely counted on by those who "masterminded" what they think is a brillant scam.

Anyone who thinks this is fiction need only try to find out who actually owns the indivdual mortgages serviced by companies like Saxon. These companies are required to provide that information if requested in writing by the homeowner, but it's amazing how many times these requests get "lost" or are never received. Almost sounds like a pattern of ignoring anything that would require these companies to begin indentifying the actual "investors" that they represent.

We've got some of our guys trying to get to the bottom of this mess, and we'll submit anything we find to the SEC and other germane regulatory agencies. But, wouldn't it be great if the Federal government would devote a little investigative effort? I'm sure taxpayers would like to know if the same loans have been satisfied, in full, two or three times already using taxpayer money disquised as "rescue", "TARP" or whatever they want to call it.