May 25, 2017


By Timothy Stull (

The foreclosure crisis that launched in 2007, hit a zenith in 2011 and continues to drag on, has new serious problems on the frontier.  As mortgage servicers try to figure out how to handle the problem of serious delinquent loans (12+ months late), the new age of “fraudulent loan modification agreements”  has surfaced.  Padded loan balances, distorted escrow accounts and ambiguous balloon payment terms have wreaked havoc in the market.  Most of these problems start with the trial loan modification agreements, where mortgage servicers lay out a plan with “trial payments” and nothing more.  The problem with the trial plans is that the servicer is not bound to a permanent deal…..they can simply flip the switch at any time.  Though the mortgage servicers will state that the roots of the trial plan are strong, case law has proven that the home owner is left in serious jeopardy with these ambiguous plans ~  Racketeering and RICO claims come into the picture and long legal battles ensue.  Recently, Ocwen Loan Servicing was sued by Federal and State authorities, primarily for distorting loan balances and escrow accounts ~  In short, this is nothing less than intentional & fraudulent accounting practices.  So why the sudden explosion of fraud?  Well for one, the servicers can get away with it most of the time.  Home owners have been brain washed by the government agencies to handle loan modification negotiations solo….leaving them at a serious disadvantage.  The loan modification agreements are written by corporate attorneys and typically contain legal loopholes that can’t be identified by the common man.  Secondly, the trade profit between mortgage servicers has dwindled greatly.  Payments are harder to collect and pushing delinquent portfolios to performance is getting more challenging than ever.  Therefore, mortgage servicers need to resort to devious and underhanded trickery….via the fraudulent loan modification deal.  In summary, hiring a professional firm to handle the loan modification process is always a good idea.  There is just too much to lose on multiple levels,  during a process that nearly all home owners do not fully understand.  Feel free to call our office at 877.297.7011 or email for free insight and advice.


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