Companies that process mortgages on behalf of the mortgage holder, are known colloquially as “servicers.” Frequently, the servicer will be the only party with whom the homeowner has any contact. Abusive servicing can involve a variety of practices, some of which have resulted in huge financial losses for low-income homeowners. Recent press reports and litigation have documented widespread misconduct in the industry, including misapplying mortgage payments; hitting customers with bogus late fees and charges; prematurely launching foreclosure proceedings against homeowners; and “force placing” high-cost homeowners insurance on borrowers despite receiving evidence that the borrowers already had insurance.
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