Predatory Lending and Loan Servicing

If your mortgage lender engaged in any predatory lending or predatory loan servicing practices, like false or deceptive advertising, making phony home improvement loans, charging yield spread premiums, forcing borrowers with good credit into high interest rate sub-prime mortgages, charging excessive points and fees, and charging bogus and other junk fees, to name a few, you may have the leverage you need to force your lender to agree to a loan modification.

Predatory servicing of mortgage loans is the fraudulent or deceptive loan servicing practices that some companies engage in during the servicing process. For example, a company servicing a loan would be the "mortgage company" you are dealing with handling the collection of your monthly payments, etc on behalf of the true owner(s) of your note which more than likely has been grouped in with hundreds of other notes as an investment. Technically there isn't a legal definition for predatory mortgage servicing. But this term is widely accepted by federal and state agencies. To name a few - the Federal Deposit Insurance Corporation, Consumer Financial Protection Bureau, Office of the Comptroller of the Currency, Federal Trade Commission, Fannie Mae and Freddie Mac.

Even though there aren't distinct laws in opposition of predatory mortgage servicing exploitation, from the local level to the federal level, there are laws against a lot of the particular practices that are commonly understood to be predatory mortgage servicing. The agencies use this term as a catch-all for a host of such illegal practices occurring in the mortgage servicing industry. Don't confuse predatory mortgage servicing with predatory lending. Predatory lending is used to describe the misleading, unjust, or sham practices of mortgage lenders and brokers during the origination of the mortgage loan.

Many of these practices stem from ruthless servicers feeling there is an incentive for them to add fees to the house note which makes them more money. These added fees often push the note into default which then allows the servicer to begin foreclosing on the property. Since the servicer is permitted to keep the net proceeds of the foreclosure sale, a foreclosure is quite profitable to the servicer.

If you have a mortgage and feel as if the mortgage company is bent on seeing you lose your home, you're more than likely right - because it may be more profitable to them to see that you do.

There are options, however, to regain control over your mortgage. I sue mortgage companies for predatory lending and predatory mortgage servicing.