uscitizen
Villified User
AP IMPACT: Gov't mortgage partners sued for abuses
Aug 5, 3:59 PM (ET)
By DANIEL WAGNER
WASHINGTON (AP) - Billions of dollars the government is spending to help financially pressed homeowners avert foreclosure is passing through - and enriching - companies accused of preying on the people they're supposed to help, an Associated Press investigation has found.
The companies, known as mortgage servicers, are middlemen who collect monthly payments from homeowners and funnel the money to the banks or investors who hold the loans. As the only link between borrowers and lenders, they're in the best position to rework the terms of loans under the government's $50 billion mortgage-reduction program. The companies earn a fee for every successful loan modification.
But the industry has a checkered history. The AP found that at least 30 servicers have been accused in lawsuits of harassing borrowers, imposing illegal fees and charging for unnecessary insurance policies. More recently, the companies also have been criticized for not helping homeowners quickly enough - delays that lead to more fees for homeowners and profits for servicers.
The biggest players in the servicing industry - Bank of America, Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. - all face litigation, some of which has led to settlements with homeowners. All will receive federal money to modify loans.
http://apnews.myway.com/article/20090805/D99SU91G0.html
Pruned by JPP Staph
Aug 5, 3:59 PM (ET)
By DANIEL WAGNER
WASHINGTON (AP) - Billions of dollars the government is spending to help financially pressed homeowners avert foreclosure is passing through - and enriching - companies accused of preying on the people they're supposed to help, an Associated Press investigation has found.
The companies, known as mortgage servicers, are middlemen who collect monthly payments from homeowners and funnel the money to the banks or investors who hold the loans. As the only link between borrowers and lenders, they're in the best position to rework the terms of loans under the government's $50 billion mortgage-reduction program. The companies earn a fee for every successful loan modification.
But the industry has a checkered history. The AP found that at least 30 servicers have been accused in lawsuits of harassing borrowers, imposing illegal fees and charging for unnecessary insurance policies. More recently, the companies also have been criticized for not helping homeowners quickly enough - delays that lead to more fees for homeowners and profits for servicers.
The biggest players in the servicing industry - Bank of America, Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. - all face litigation, some of which has led to settlements with homeowners. All will receive federal money to modify loans.
http://apnews.myway.com/article/20090805/D99SU91G0.html
Pruned by JPP Staph
Last edited: