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In this broadcast Mortgage Fraud Investigator Bill Paatalo and Southern California Attorney Charles Marshall join Attorney Neil Garfield to discuss Loan Modification Fraud. Loan Modification Fraud by Loan Servicers is on the rise. Unsuspecting homeowners are not aware that servicers are modifying their loans without their consent.
When a loan is modified it is a revision to the contractual payment terms of the related mortgage note, agreed to by the servicer and borrower, including, without limitation, the capitalization of any amounts owed by adding such amount to the outstanding principal balance.
Mortgage servicing fraud generally involves the diversion or misuse of principal and interest payments, loan prepayments, and/or escrow funds for the benefit of the service provider, but not the consumer.
Bill Paatalo conducted an investigation for a client that revealed that the servicer (Nationstar) was reporting to the investors of a REMIC trust that the loan/debt received a “Capitalization Modification” in the midst of foreclosure proceedings, and just prior to the Sheriff’s Sale of the property.
The end result is that there is likely not a borrower default, the outstanding balance is incorrect and all too often the trust doesn’t own the note, the note no longer exists, or there are no losses to the servicer. Proving this is true is more difficult and an attorney should ask the defendant (servicer) to:
- Produce remittance reports limited to the time period when Defendant was acting as servicer
- Produce copies of unredacted and redacted documents to plaintiff to determine whether attorney/client and/or attorney work product privileges were properly claimed.
For an article on this story please go to: http://bpinvestigativeagency.com/federal-judge-compels-nationstar-to-produce-false-modification-accounting-records/
Investigator Bill Paatalo can be reached at: (406) 328-4075. http://bpinvestigativeagency.com
California Attorney Charles Marshall can be reached at:
Filed under: foreclosure