What is the Value of Consumer Time in Getting the Run Around With Servicers?

I recently received exactly that question, from one of the readers who made a donation to the blog to get a direct answer. I thought I would share the answer with you and invite other comments.

First the question, as phrased: Is a consumer’s time worth anything when applying for a loan mod, in any state, under any legal theory you have heard of?

My Answer:

The simple answer to your question is “NO.” The time of consumers appears to be worthless in virtually all settings despite the most egregious behavior on the part of vendors, banks or anyone else. I have not received any reports from anyone to the contrary. BUT many Servicer abuses DO result in damage payouts both in the “large” bank settlements we have seen in the news and in individual lawsuits that are nearly always done under seal and confidentiality.
Your anger is probably justified and the parties you have contacted have most likely been playing with you. But there is a real question about the identity of the creditor, and therefore the legal authority of the “Servicer.” The authority of the Servicer comes from a contract to act on behalf of the REMIC Trust. But if the trust was never funded and the actual lender is a group of investors whose money was mismanaged (as alleged in many federal and investor lawsuits) it might also be true that the Servicer is a “volunteer.”
As such, the Servicer might not have actual access to the real money trail and the real creditors and thus be unable or unwilling to actually “consider” a modification. Many lawyers are reporting success in getting damages for Servicer abuses, violations of TILA and RESPA etc. Danielle Kelley, Esq. has had considerable success in enforcing modifications that were approved for a trial period after the homeowner made the required trial payments. Judges are refusing to allow foreclosure after the settlement or modification agreement has been executed.
I would recommend that you obtain the title and securitization report, an expert declaration addressed to your issues and that you consider consulting with an attorney to challenge the Servicer and the named creditor on the authenticity of their claims. In my law practice we have several clients who are current on their mortgage and have sued the parties that have been identified as the creditor. They allege fraud, slander of title etc. Others have gone the bankruptcy route where they petition for Chapter 11 reorganization or Chapter 11 liquidation.
One thing to be careful about is the unlawful practice of law by the Servicer. They are advising homeowners in an indirect way to stop making payments in order to “qualify” for consideration of a modification. This is a way to trick homeowners into default and foreclosure based upon the correct assumption that most homeowners will not escrow the payments that were withheld and will get deeper and deeper into default.
Your question goes to a deeper issue. If you were to file suit based upon the value of your time it might break ground for thousands of other people. The fact is your time DOES have a value. If you were tricked into spending time that was futile because of internal policies and goals of the banks (just to wear you out), I think most lawyers would agree that under existing law, there is a valid cause of action, despite the obvious reluctance of the courts to allow it. It would probably need to be carefully worded to avoid pitfalls that would cause your lawsuit to be dismissed.
Lastly there are often state programs that were federally funded that could be of assistance but nobody talks about them. Right here in Florida we have a distressed homeowners fund that hardly anyone has touched. in Arizona the same thing has happened — $300 million and hardly any homeowners have applied for relief. And I might add that the servicers are subject to regulation, and compliance with the OCC consent judgments, that might be the basis for equitable or legal relief.

This is for information purposes only. Do not to take any action without consultation with a lawyer that is licensed to practice in the geographical area in which your property(ies) is located.


18 Responses

  1. You should see how much fun they are on short sales. Wow.

    Are they autistic?

    Helping them to gain a whole new sense of awareness would not exactly be rocket science and I am surprised somebody hasn’t done so – yet.

    Spun-out goons in suicide mode, still.


  2. @ Scott ,,

    I hear you on OCWEN ,, I’ve got them pretending to be WF against me … real scum ,, I’m about to drop a nuclear bombshell on (just substituted in) plaintiff attorney group #3 ,, actual WF Trustee docs showing NO DEFAULT almost 2 years after they claimed on their “verified” filing … you can be master servicer or you can be sub-servicer ,, BUT YOU CANNOT BE BOTH … they have different obligations and operate with different client sets… and you sure can’t be trustee and a sub servicer simultaneously…

    Lets see if I can get ANOTHER plaintiff attorney firm to bow out to avoid perjury.

  3. After Owning a little mtg biz in MO there has been a time or two I have been about yay close to catching a hop to Litton’s/Ocwen office etc and jamming a GLOCK into somebody’s vile – lying – mouth.

    Matter of fact – I just may set up a little mortgage default fund of my own.

    A real one.

    1% One time fee + a 1% deeded interest in the property payable when sold.

    Or before, doesn’t matter.


    I aim to park a very real private security detail on the property in the event anybody is forced to default.

    Paying the payment is one way to do it as well – but if they are unable to contact me prior to the default and I am notified via formal +

    Well then we would be off to the races.

    This could get fun.

    Thoughts/Opinions ?????

    Make it a Great Day.


  4. @ Scott Thompson – yeah it works really great unless of course you exercise the contract. I know one guy who paid this bullshit feature for 5 years, lost his job and now they refuse to pay his claims.

    This is a class action suit in the making, and my guy is close to lead plaintiff status.

    Be smart, stay away.

  5. KC,

    You’re missing such an enormous point… Oh well.

  6. RE: ” and hired an outside firm, the Promontory Financial Group”

    Enough said …

  7. Interesting… Karen Hudes has been extensively talking about the world going back to the rule of law. And this country being the last one to comply.

    Pope removes cardinals in shake-up of Vatican bank.
    By Philip Pullella

    Related StoriesVATICAN CITY (Reuters) – Pope Francis shook up the scandal-plagued Vatican bank on Wednesday, removing four of five cardinals from an oversight body in a break with the clerical financial establishment he inherited from his predecessor…

    …Francis has not ruled out closing the bank, which is formally known as the Institute for Works of Religion (IOR), if it cannot be reformed…

    … The bank has undergone major changes since the arrival last February of its new president, Ernst Von Freyberg, a German.

    His team has closed many accounts and hired an outside firm, the Promontory Financial Group, to help it meet international standards of transparency drawn up to combat money laundering…”


    How to remain joyful: believe that things will get better soon and look for the evidence of it happening. Beats doom-and-gloom any day of the week! Oh Gee, would you believe it? It’s biblical too!!!

    And no, John Wayne ain’t coming back: he was a big part of the problem…

  8. “To continue to say that they are a “lender” is dis-info. Always has been. To the detriment of many. This guy made a donation to get that answer. Sad.”

    That was idiotic and moronic then. It still is now. And those claiming it the loudest are the least likely to actually take action and test it in court… So much easier to make sweeping statements and accuse everyone of dis-info. Funny though: those at the origin of this statement and who tried it over and over are slowly backing away from it and reconsidering the past 9 or 10 years fighting in court on that basis…

    That is why, 7 years into this debacle, banks continue to win and the entire world is pulling away from capitalism a l’Americaine. The tell-tale evidence that this country is done and f***ed it up big time!

  9. Jellybeans I am giving Kamala the benefit of the doubt. So she can say she is not only going after the banksters.





  11. KC—To continue to say that they are a “lender” is dis-info. Always has been. To the detriment of many. This guy made a donation to get that answer. Sad.

  12. Just give me all 120 payments made and my cash down at closing and they can have and keep the house.

  13. Extra Credit Questions..

    Where is the taxpayer money? What was it used for?

    Many Blessings to All and to All a Good Evening!

  14. Credit Line Obligation …. CLO
    From Investment Bank to correspondent debtor/plender.

    What happened to it? How was it paid?
    Where did the investors money go? What was it used for?
    Where did the borrowers money go? What was it used for?
    Where did the Warranty Deed go? The one needed to perfect the dot.

  15. It’s no use. They all have their little pet theories they harp on over and over. When economists write about the methodology behind the greatest financial scandal ever visited upon humanity, I listen. Apparently, so does Garfield who just happened to have worked on WS. Bloggers questioning the mechanism of the fraud and making stupid sweeping statements they never even tested, in court or otherwise, deserve what they got. Follow their advice at your perils.


    Globalization: Quo Vadis?

    “The financial crisis is a result of unregulated mortgages and credit boom that were pushed by the low interest rate, set by Federal Reserve (at that time Federal Reserve Ratio was only about
    one percent). Commercial banks increased their borrowing heavily and exercised the practice of leverage. Because of the profitable results of leveraging, investors also wanted to benefit from
    this opportunity.

    The idea was as follows: the mortgage lenders and investors were connected through the investment bank, which obtained the mortgages and added them up into collateralized debt obligation (CDO)

    http://www.tcmb.gov.tr/yeni/iletisimgm/RIGA.pdf (p. 24. Denying the obvious won’t make it go away: there were investors AND lenders. Investors’ money used by lenders WAS mismanaged. Investors LOST bundles.)

    CDOs are classified into different risk classes, whereas the safest ones were also insured using the Credit Default Swap (CDS) so that prudent investors would be satisfied. Investors regarded insured CDO’s as the safest ones. Credit rating agencies
    (Moody’s, Standard & Poor) strengthened this belief by putting AAA rate on it. The investments of lowest risk brought the interest of 3-4 percent – much better than the Federal Reserve rate.

    So it comes as no surprise that investors started to command more CDO’s to fill in their portfolios.”

  16. Why Me Lord? Why Me? Carie has been here, what 4yrs?
    Sheesh …. its time for you to Graduate Sweetie!

    Take #101 …

    UCC 1 filing in upstate New York for shares owned by a Delaware partnership made up of member bank Officers and Directors who wagered their banks retirement funds and pension funds.

  17. “…But if the trust was never funded and the actual lender is a group of investors whose money was mismanaged…”

    “Actual lender”? Really, Neil? My God, all these years later and you STILL say that. Wow.

  18. It should be a million dollars and a swift action from SWAT – they could blow through Ocwen’s offices today with PRESENTS FOR EVERYBODY!

    Is anybody else hearing about PMI that has begun adding the Borrower to the policy?

    An outfit in Florida calls it a “Financial Product”


    Why weren’t we doing this years ago?

    Make it a Great Day.


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