Houses for Sale in LA
Have you ever experienced a problem with the company that services your home mortgage? Maybe a payment didn’t get credited to your account and you had to spend hours on the phone trying to correct the problem?
It’s a pain, but most of us just write it off as a clerical error or someone just making an honest mistake. We might get frustrated and angry, but at the end of the day, we don’t honestly think someone intentionally tried to deceive us or steal from us.
Well, according to a recent article in the LA Times, that might not always be the case.
It seems that the Consumer Financial Protection Bureau routinely – and the fact that it is routine is scary enough – sends investigators to the offices of mortgage service companies they suspect of “unfair and deceptive practices”.
Some of the more common fraudulent practices mentioned in the article are:
Failing to properly cancel private mortgage insurance (PMI) premiums once the appropriate threshold had been reached. Essentially, servicers continued to charge PMI after principal mortgage value reached 78% of the original property value.
Setting up a biweekly payment plan but only crediting a monthly payment. People often pay extra and extra fees to have the ability to make a payment every two weeks rather than once a month. This allows them to pay off their loans at an accelerated rate. Some servicers were taking the biweekly payments but only making one monthly payment and pocketing the difference.
Misreporting short sales and loan modifications as foreclosures. While this is not a predatory practice, it is grossly negligent. Misreporting a short sale where the lender agreed to accept less than the full amount owed for a home as a foreclosure can have a disastrous impact of the borrower’s credit rating.
Not honoring modified terms after a loan has been transferred. Some companies chose not to honor the modified terms of a loan after it had been transferred to them. This caused no end of problems for borrowers.
While it is horrible that these things have happened to anybody, it is important to remember that not all mortgage service companies engage in predatory or negligent behaviors. In fact, most are very conscientious. That being said. It is up to you, the borrower, to make sure that you are being treated fairly by the company servicing your mortgage. If you are planning to buy Los Angeles real estate or already own LA real estate – whether a West Hollywood condo or a luxury property in the Hollywood Hills – you need to educate yourself about the rules and regulations that govern the lending industry. They are changing, and many of the changes are designed to protect consumers like you from predatory lending practices.
If you think something is amiss, don’t hesitate to contact the CFPB. They are always willing to help.
To read the complete article in the LA Times, please click here.
Susan Andrews | Estates Director
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Susan Andrews is your ultimate real estate source for Los Angeles, California and surrounding communities.
Photo courtesy of Xurxo Martinez at Flickr.com.