Texas AG Charges Servicer With Violating Debt Collection Laws

Texas AG Charges Servicer With Violating Debt Collection Laws

Tuesday, August 31, 2010

Texas Attorney General Greg Abbott has charged Coppell, TX-based American Home Mortgage Servicing Inc., the nation’s largest independent subprime servicer, with allegedly “using illegal debt collection tactics and improperly misleading struggling homeowners.”

According to a statement released by his office, AHMS collections agents used “aggressive and unlawful tactics to collect payments from Texas homeowners who had difficulty meeting their payment obligations.” State investigators claim the defendant also failed to credit homeowners who properly submitted their payments on time.

The enforcement action charges AHMS with multiple violations of the Texas Debt Collection Act and the Texas Deceptive Trade Practices Act. The state is also seeking civil penalties of up to $20,000 per violation of the DTP.

Philippa Brown, a spokesperson for American Home Mortgage, said the company does not comment on pending litigation.

AHMSI is owned by the New York-based private equity firm WL Ross & Co., which did not return a phone call for comment by deadline today.

16 Responses

  1. So what is a person that is not behind on their mortgage do? I feel as if somehow we will get the short end of the stick when it comes to a clear title.
    Should I hire us an attorney? AHMS has our 1st and Citmortgage has our 2nd. Both a fixed rates but we are listed as a MERS account
    Please someone advise me

  2. Attorney general of Texas has just sent demand letters to 30 servicing
    co. LITTON LOAN IS ON THIS LIST
    we hit a grand slam – im pro se – sword of david- Slain forgiver of
    DTCC for they know not what they do

  3. ian

    No offense to M. Soliman – but do not always understand what he is saying.

    1) the loans are sold to Wall Street financial institution

    2) the receivables to the loans are initially reflected on balance sheet as “whole loans” receivables.

    3) Wall Street financial institution subsidiary (security underwriter) securitizes the loans by removing the whole loan receivables from on – balance sheet to off-balance sheet conduit – IN THE FORM of “securities.”

    Thus, by accounting, the whole loan receivables are removed from on- balance sheet to off-balance sheet, and in the process – also by accounting, the whole loan receivables are converted to securities – which were not consolidated for reporting on the Wall Street financial institution balance sheet – because they remained as “securities” on the off-balance sheet conduit.

    FASB 166 and 167 – mandates that the off-balance sheet securities be brought back onto the balance sheet of the Wall Street financial institution. Most were required to do so as interference during the crisis negated the status of “Qualifying Special Purpose Entity”.

    What many do not understand is that securitization converts whole loans receivables into securities – the purpose of this was to pass-through the receivables to security investors. However, pass-through security investors are NEVER the creditor.

  4. This article is particularly timely to me… several weeks ago I went to the Attorney General with tons of evidence of notary misconduct and forgery on the record and was gently and kindly blown off… go away little girl 🙂

    But… AGs and other government officials can change their tune very quickly when you give them something “easy” 🙂 Last week I realized that while I was digging through the devilish details of my loan, I forgot to check one obvious detail: Is the latest servicer licensed in my state (Colorado)? Specifically, are they licensed as a debt collector?

    See, in most cases and many if not most states, when a servicer acquires your loan WHILE IT IS IN DEFAULT, they are subject to the FDCPA. In Colorado (and other states), that means they not only have to be registered (foreign) corporation with the Secretary of State, licensed as a lender, or whatever other licensing requirements exist, they ALSO have to be licensed as a Debt Collector and/or Collection Agency.

    Turns out the latest servicer on my loan, who did acquire my loan (from the FDIC) while it was in default, must be licensed as a debt collector. As of July 1st, 2010, the laws of Colorado also require they have a PHYSICAL presence here, one that is open normal business hours and staffed by personnel that a consumer can go in and talk with about their account, accept payments, etc.

    Well what do you know. They are not licensed in the state of Colorado. Can you say “oops?” 🙂

    So JUST TODAY, I contacted the Attorney General (in Colorado, debt collector/collection agency licensing is done through the AGs office) and oh boy, did I get a wonderful response! All over this – a FDCPA complaint that is so obvious and virtually undefendable? Oh ya 🙂 And did ask me to include in the information any information I may have on other people this company is trying to collect on, and to have those I know personally (four others so far in my small town) to file their own complaints too.

    I’ve had zero luck finding a lawyer here who could help me defend against foreclosure (which likely will be filed after the 25th of Sept). But, on a lark, I decided to call lawyers about FDCPA complaints. Called five. All five made appointments with me over the next 2 days (free consultations) to review my information and consider representing me in FDCPA case. 🙂

    The funny thing is I’m VERY versed in the FDCPA, and can actually handle a FDCPA complaint pro se quite effectively – have done so more than a few times already in the past. I work in a call center for a credit card company and have to “certify” on the FDCPA three times a year, too. I know it pretty much upside down. Can’t believe I didn’t think to look into this immediately last month when the FDIC sold my loan.

    Anyways… once I get the information to the Attorney General, they said they’d send out a cease-and-desist letter that would “be very beneficial to you almost immediately, while our investigation proceeds, but that can take a while.”

    I am thinking that it would be a good idea for me to get the complaint to the AG and also file in my court a FDCPA complaint simultaneously.

    What exactly it would mean, legally, if a judge rules they have no authority to collect on the debt… that I’m not entirely sure of. A debt that can’t be legally collected … what are the legal implications of that?

    Do I dare hope?

    Still, it’s so nice after so long to feel like something may be going my way 🙂

    The FDCPA is your friend 🙂 Use it 🙂 It’s also a good thing to use in a defense of recoupement 🙂

  5. Anonymous- you mentioned that the entities”…securitized their on-balance sheet receivables”. In actuality, didn’t they attempt to securitize their off-balance sheet receivables, yet at the same time claim the receivables as assets? Isn’t this the crux of Maher Soliman’s posts? Or am I confused on yet another topic? For instance, in round numbers, MBIA paid Credit Suisse say 285 million after some insurance kicked in on some of CS’s defaulted bonds, now, MBIA says,that upon further investigation, that 85% of the underlying mortgages breached the reps and warranties, and that, ostensibly,CS now has to make good on the bogus mortgages? Google this lawsuit, I think it is in the NY courts. Now, the sponsoring entity has to take all the bogus mortgages back onto their books? Isn’t this the what the whole charade is about? anyone please chime in, I am struggling with this in a larger context, if I can get a handle on it, I can approach someone of national influence. But right now, I am adrift. Thanks.

  6. dying truth- litton loan servicing was purchased by
    goldman sachs within the last two years. In January of 09, I believe, Larry B.Litton was appointed to the Consumer Advisory Board of the New York Federal Reserve. Litton Loan Servicing, check consumer complaints of google, is a subhuman illegal piece of garbage. I don’t think that there are any laws currently in existence to protect borrowers from what Litton Loan does for a living. They are a pathetic assemblage of human vermin. I know that I shouldn’t sugarcoat my opinions, I thought I’d let them off easy.

  7. WL Ross & Co. is a distressed debt buyer. They also purchase companies who are struggling – in an attempt to “turn around” the company. Unfortunately, most often the companies cannot be be turned around and WL & Ross are then entitled to any assets. You might also recall WL & Ross from the coal-mining “accident” some years ago. Coal miners were killed – after WL Ross acquired the company – and families alleged safety issues were compromised after the acquisition which caused the accident.

    brian davieS, – Opteum was located in New Jersey. It was a Real Estate Investment Trust – and I am not sure sure of the current status – but believe it is gone. Debt collection buyers may have connected.

    Warehouse bank – just funds the loan for another party. It is often a “warehouse line of credit” that is utilized in closings – by some party – but is short term in nature. The loan does not remain with the warehouse lender. See Federal Reserve May 2009 TILA Interim Opinion for explanation of warehouse lenders. There were also other short-term lending facilities – such as commercial paper – that provided a source of short-term funding. Ultimately, all loans were sold to some predominant financial institution – who then securitized their on-balance sheet receivables. Many loans were immediately sold back to originators – as a scratch and dent – and originators sold to entities such as Opteum and WL Ross.

    Wl Ross continues to be a major distressed debt buyer for loans the financial institutions retained but were subsequently charged-off and disposed of to distressed debt buyers such as Wilbur Ross. If AHMSI is your pretend lender – then Wilbur’s got your loan – and Wilbur likely purchased it – at a steep discount (know Brian, this is not your case)..

    Brian – since IndyMac was involved – the FDIC should be obligated to give you a complete chain of title.

  8. That’s Why the Federal Gov. is so screwed because they use illegal immigrants to subsidize Social Security. MGIC is practically owned by Litton Loan. What’s most screwed is latinos come here seeking a better life, only to get caught in an insidious trap and lose it all just like most americans.

  9. To:: Jose Fighter…Who did you chose in the DC area?. I hope the one I recommended. Cause the rest are all …’Ripoffs”!

  10. Today, I had the pleasure of meeting an individual, a lawyer that was recommended to me. After I shared my case and other info, I was very pleased and confident, that after almost three years of fighting this fight, I may have found the right lawyer.

    Do not ever give up. times are tough, but it is really up to each one of us to fight.

    May god bless all of you fighters out there.

  11. For these people and their foreclosure mill lawyers, is very easy. They give you a bad loan without putting their ill gotten money at risk. they do it by using other people’s money. Once you get hit by the mess they created, you find a legal system that had been previously shaped against you, remember the changes to the statutes allowing the unconstitutional non-judicial process, that allows these crooks to lie and cheat at will.

    And the fact that by the time you are about to start your fight for your future, you are literally financially dead, you have already been taken for a ride with a fake and fraudulent temp mod and all the money you had to pay a half decent lawyer is gone. If that was not bad enough, then you have no choice but to hire someone in some rat hole of an office and throw the dice with your future.

    Once you are in court if you are lucky, the guy you hire is afraid to rock the boat and fails to be properly prepared to defend your cause.

    The way is so full of obstacles that one wonders, however, remember, if you do not fight they will get the windfall, if you fight at least you may get your day in court.

    That is why, we need to get together and fight at different fronts…the Legal, Political, social, and financial fronts.

  12. This was given to me by accident. This was a snapshot of my closing docs about the time the RAST 2007-a5 trust was closed.
    My originator was on 11-17-2006—> universal american mortgage(lennars subsidiary)
    –>sold note and servicing on 12-21-2006 to Opteum
    –>sold note and servicing to indymac on 3-2006.

    does anyone know what this document below references?

    INVESTOR
    471 – INVESTOR LN# DATE /SOLD Indy Mac Bank
    3/15/2007

    STATUS
    SERVICER POOL #
    708-Fund
    Indy Mac Bank, F.S.B. IMACO20507
    FINAL DQCS 312612007 7:22:42PM
    SSW
    BORROWER NAME : Davies, Brian LOAN # 8600018614
    STREET ADDRESS: 43-277 Sentiero Drive
    Indio, CA 92203
    DATE FUNDED 11/17/2006
    DATE DISBURSED: 11/17/2006 40,11,WAREHOUSE BANK- Colonial Bank PRODUCT CODE 38030FBU1
    DESCRIPTION 30 Year Fixed Alt A 1/0 Buydown Interest
    Only
    LOAN TYPE : Cons,

  13. Yes, indeed, Undocumented alliens did buy and refinance homes. Citi, BOA, Wells Fargo, Wachovia and other lenders designed special programs for that purpose. Remember they needed more and more people buying homes. They were running out of victims.

    It is the undocumented aliens misconduct, it was the lenders and the financiers misconduct. I have seen hundreds of loan applications where the L.O. placed the undocumented as a US Citizen because they had to lie to get the loan done. But told the undocumented alien who is not necessarily a genius in financial affairs that they had a special program for people like him.

    I have seen thousands of loan applications where the L.O. place legal resident aliens as US Citizens, because they were so lazy to ask for a copy of their documentation.

    FRAUD, FRAUD, FRAUD.

    They the financiers, the pretender lenders and their cronies got bailed out, we all got shafted.

    Chevy Chase FSB, now Capital One Bank have an on going program that caters to these segment of society.

    Remember, just like the NO INCOME, STATED INCOME loans you all got, they did not care if you paid or not, they all made their money and run.

  14. Illegals bought homes.

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