The Strategic Warfare of Mortgage “Servicing”

By William Hudson
You can choose your sexual orientation and even your ethnicity but you can’t change your loan servicer. Mortage “servicing” is the ultimate misnomer. Modern loan servicing has nothing to do with service but instead provides a “disservice” in order to boost profits or engineer a default if at all possible. Being forced to contract with a sketchy loan servicer is like being forced to stay married to a spouse who lies, cheats and steals all your money.

The servicer’s job is to collect payments and manage the day to day operations of the loan, but servicers have taken on the new role of “default engineer” and “disinformation agent”. The servicers have found a new way of increasing profits and it is at the expense of a customer who has no choice in regards to who services their mortgage.

It is likely that the servicing rights to your loan were sold to either  the lowest bidder, or Pirates-R-Us Loan Servicing who purchased the note at a fire sale for pennies on the dollar with the knowledge that your loan had some major defect. It is even possible that your loan servicer is not a servicer at all but is pretending that they are forwarding your payments to the true owner when instead they are keeping your monthly payments for their own enrichment (and there is no creditor).

The typical tools servicers use to create a deliberate default include:
• providing disinformation or conflicting information to the homeowner
• failing to follow through with agreements (modifications or repayment)
• misapplying funds/refusing to take payments
• weeks spent trying to correct an issue (phone transferitis followed by disconnect)
• failure to answer QWR or failure to provide requested answers
• failure to acknowledge rescission
• backdating denial letters so homeowners don’t have sufficient time to challenge the              modification  denial
• forced-place insurance
• assign servicing rights to new servicer
• dual-tracking while modification is under consideration or borrower is in compliance
• revoking modification when homeowner is compliant (no opportunity to appeal)
• bankruptcy payment issues (misapplication of payments pre and post-bankruptcy)
• fabricating document to create the appearance of holder status
• misrepresenting status of relationship to loan
• Fabrication, forgery and other tactics to “perfect” the appearance of holder status

All of these activities serve to confuse the homeowner and require significant amounts of time and frustration to resolve as days, weeks and sometimes months are spent on trying to correct the situation (during work hours).   On a regular basis Servicers now participate in calculated fraud in order to create a default. The unsuspecting homeowner can be lulled by their servicer into practices that will increase the chances of foreclosure.

Over the past several months, the Lending Lies team has seen a disturbing trend of servicers taking advantage of people who are elderly, obviously mentally incapacitated, and economically vulnerable. Servicers are now aware of who the best victims are and who to pursue with impunity. The elderly who are on fixed incomes are particularly vulnerable, single mothers who are burdened by work and raising children on their own appear to be targets, and we have seen more and more mature single women with few assets except for their homes being given incorrect information to deliberately force them into arrears (many of these women acquired real estate through divorce or a spouse’s death- and are told they have no survivor rights and the bank refuses to accept payment). These people lack the financial resources to obtain legal assistance, and often are so beaten-down emotionally they have no ability to fight back.

The servicer’s current weapon of choice continues to be the loan modification offer, when the bank has no intention of granting one. During the loan modification process, paper work will be destroyed, customer service reps will claim to not have received paperwork, and the homeowner will be caught in an endless phone transfer loop (followed by an abrupt disconnect of the call in which the homeowner will be forced to start all over). After months of this nearly futile run-around the bank will claim the homeowner doesn’t qualify for a modification- but will then fail to provide a reason for the modification denial or an opportunity to appeal the servicer’s decision (last week Ocwen was sanctioned by the National Mortgage Settlement for this metric violation). Another tactic is to dual-track the customer (proceed with foreclosure while homeowner is in negotiations for a modification).

Unfortunately almost all homeowners are at the mercy of the party who acquires the servicing rights to their Note- and if the homeowner has the misfortunate of their loan being acquired by Ocwen, Nationwide, Bank of America, JPMorgan-Chase, CitiMortgage or Bank of America- the homeowner is almost assured that if they miss one payment during the life of their loan or have some other issue- there will be hell to pay and the bank will make it as difficult as possible to correct the issue.



Without effective counsel, the homeowner is literally at the servicer’s mercy.
Part of the servicer’s modus operandi is emotional warfare. First of all, mortgage issues are complex and most homeowners have no comprehension of what is going on except for what they are told by low-level employees at the banks that are literally practicing law without a license when speaking to homeowners. By keeping the victim confused, on edge, unable to receive concise answers and other gaslighting techniques- they can exponentially increase default odds in their favor. Most homeowners will follow the directions of their loan servicers without question- and are taken advantage by their naiveté and willingness to comply with the servicer’s demands. It is unconscionable that a loan servicer with a conflict of interest is able to advise vulnerable homeowners about saving their home when the servicer has very clear goals of foreclosure.

Over the past nine years, servicers have learned how to “perfect” their default model to ensure foreclosures occur. Now that it is well known that the servicers forge signatures, falsify notarizations, and fabricate documents, the banks have now reverted to “Plan B”. If paperwork they forged and altered over the past six years is a known liability, lenders are now resorting to “lost note” strategies so they can try to start over with a “clean” slate. Once they have convinced the court the note was lost and claim plausible deniability they can use a lost note affidavit to try and correct any earlier issues or oversights that occurred when sloppy fabrication and forgeries were used. The banks can then recreate their foreclosure “storyline”  in order to “perfect” their standing. Don’t be fooled by this tactic.

The homeowner’s chance of saving their homes are compromised when their own servicer behaves in predatory ways. Servicers are well aware of how to create a default and who to best target for their crime. The National Mortgage Settlement has proven impotent to stop loan servicers from continuing with their deceptive tactics. Society’s most vulnerable are victimized and have no hope of fighting back against these abusive servicer crime-syndicates with deep pockets, political allies and the courts in their corner. Welcome to the new America.

17 Responses

  1. Perhaps each of us needs to get on twitter or send a letter to our congresspeople and ask that “allowing homeowners to select their mortgage servicer” become a front and center issue. If enough people ask the will need to listen…but the banks won’t like it.

  2. Mortgage Servicing if handled in a legitimate way is a terribly simple business… even to service a million loans you’d need only a handful of programmers and worker bees and a call center….

    I have experience with servicing tens of millions of consumer accounts in the cellular billing industry and that is far more complicated than a relatively static inflow and outflow on each bill cycle.

    We need Congress to make it possible for consumers to choose their servicer… That would clean up the industry.

  3. “…..It is likely that the servicing rights to your loan were sold to either the lowest bidder, or Pirates-R-Us Loan Servicing who purchased the note at a fire sale for pennies on the dollar with the knowledge that your loan had some major defect. It is even possible that your loan servicer is not a servicer at all but is pretending that they are forwarding your payments to the true owner when instead they are keeping your monthly payments for their own enrichment (and there is no creditor).”


    The two are not mutually exclusive ,, AHMSI (now Homeward Residential) did both in the transaction with Option One (fronting for BAC) on 4-30-2008…

  4. Reblogged this on California Freelance Paralegal.

  5. My wife is also in the middle age targeted with fabricated note and defective assignment from the servicer. She is extremely disappointed with the corruption, greed and injustice that are going on having no one to complain for remedy. She is thinking of renouncing her American citizenship and apply for refugee and protected status in another country. No kidding. No kidding. What a shame !

  6. yes sheri i am 55 white middle class, single mom. they definitely targeted me

  7. Reblogged this on Deadly Clear and commented:
    All of this is painfully true.

  8. The real deal is congress,none of this could have happened,is still happening,will happen again without the green light by our congress,and thats where Americans need to focus.

  9. Dr David,

    I have not filed a bankruptcy.
    I have heard people start one, get the information they need and do not follow through to the end, ie, do not consummate the bankruptcy.

    For the times when many were filing, and even those I knew, it seemed to me that within six months of liquidating their assets, their employment was affected to.

    So many of them had layoff in common, and none of them talked.
    So I could only guess, because I do not know.

    Needless to say, it’s a way to stop the clock and get your ducks in a row if you want to use it for that.

    Some people go after validating the debt, or suing in federal court to get them to disclose the transactions behind the purported transactions.

    State courts are just not useful for the state.
    Where a state is to protect it’s interest in real property and even the dimensions of their borders, it sometimes seem like, just like political figures redraw boundaries for constituents to vote, we may one day find entire states disappear and their borders absorbed into other states, and instead of the 48 contiguous, it may be 10 FEMA regions or something like that.

    Who knows what’s going on but if you are going to think bankruptcy, think of it as a tool and not a solution, or at least find someone that went through it and see if they’ll talk about what happened to their life after the estate went zero.

    Trespass Unwanted, Creator, Corporeal, Life, Free, People, State, Independent, In Jure Proprio, Jure Divino

  10. They made my wife who is in her late 50’s a worry wort by sending fabricated Note and fatally defective assignment on which no action could be taken in the state she lives. Just by hearing the word foreclosure she becomes very agitated.

    Could we sue the servicer and the so called investor for damages for causing mental anguish?How about making a complaint at the Consumer Financial Protection Bureau which may be a federal branch of the United States?

  11. the big bad bully lawyers steal American tax paying layman money greed

  12. yes there targeting older American women.

  13. Reblogged this on sandrakblog.

  14. It is all about “derivatives” fraud, in service to a “re-capitalization” of a phony, central banking system.

    The banks first destroyed themselves through “subprime lending” and then went “all-in” on “Notional Derivatives”- the “Notion” is: they can steal your house and place bets (Naked short sales) you will, in fact, lose that house.

    The amount owed to derivatives is beyond any reasonable suggestion the banks may continue in “business-as-usual”. Google:

    The criminal banks are using a phony “Trust” system- “REMIC Trusts”- to hold homeowners, at bay, to thereby deny “Discovery”, as 3rd parties, to a “Trust” system that is altogether “make believe”.

    None of the “REMICs” are legitimate. They are a bold-faced lie.

    Read, “The Web of Debt”, by Ellen Hodgson Brown. The entire notion of “TBTF” is criminal, on its face. The banks that operate from our financial center are imposters.

    Elliot Spitzer, writes as follows: “Now understand that the NY Fed – perhaps the single most powerful regulatory body you know nothing about- is actually owned by the banks, p116, “Protecting Capitalism Case by Case”.

    The criminal banks within the intentionally-mislabeled, “Federal Reserve” represent a privately-owned and operated, oftentimes foreign-owned and operated, criminal cartel. Google: “HSBC Bank- “Hong Kong, Shanghai Banking Corporation”, couple your search with “drug and terror cartel”.

    They are using American Mortgages to launder drug and terror money…
    Bank of America and Wells Fargo are doing the same.

    Suggesting we shouldn’t investigate and jail the offenders, is the same as suggesting pedophiles continue along and remain anonymous within the Catholic Church.

    Article1, Section 8, makes zero allowance for the operations of criminal mayhem as in residence to our finances, as per the Constitution. The “Federal (privately-owned)” “Reserve (no reserves whatsoever, our money is created by “FIAT”- out-of-thin-air)” must be repudiated and the bankers within that system, renounced.

    A “Public Banking” paradigm must then, take its place, wherein bank credits end in Public Coffers- Not, Private Pockets.

    It is the only way to get back on track.

  15. I truly appreciate your contributions over the years but I have noticed that it is telling us how we are getting the short end of the stick but it seems to me , and tell me if I am wrong. Bankruptcy court is the best way to get the banks to show their ownership. This conclusion is after 8 years of pro se litigation against the corruption from the banks and the courts.

  16. I am an older woman and the house was my primary investment. I have wondered if they are targeting older Americans and women. Would love to see some statistics

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