Actions That Constitute Servicer Abuse At The Consumer Protection Bureau

Michael Naz

Michael Naz
( – This article is co-written by Flo Skerratt of The Diligence Group, LLC, 877-747-2969 contact [email protected].

External hyperlinks are added by Michael Nazarinia during final editing.

What actions constitute mortgage servicer abuse in 2014?

How can a consumer tell if their mortgage servicer is engaging in acts that violate the Dodd-Frank Financial Reform Act in 2014?

After all, your “Single Point of Contact” or “Home Preservation Specialist” is polite when he or she calls and says they want to help you.

This person has not been abusing you verbally, threatening to visit your home and brutalize you or a member of your family physically, or embarrassing you publicly, but they sure are taking up a lot of your time and life.

The conversations that take place are professional and superficially cordial.

And yet, the process that you are going through is taking a whole lot of time (more than 30 days with underwriter) and appears to be going nowhere because you are encountering issues such as these perhaps among others:

*You find that you have to continually re-fax or re-email the same documents over, and over, and over.

*You are required to write lengthy explanations and document minor, one-time-only deposits that appear on your bank statement. This minor deposit has no bearing on your modification case.

*You have to explain one-time, minor, reimbursements that may have appeared on your paycheck stub, to determine if the income will be continuing into the future.

*The income that you are being required to explain and document has no bearing on your ability to repay the debt or not.

*A person who lives in your home, but who is not obligated to repay the loan, is being required to write a letter stating that they agree to contribute 100% of their income toward the repayment of your personal mortgage debt.

*You have just completed sending a 160 page fax to your “specialist.” One page did not go through. You are not permitted to just re-fax the one, missing document; you are required to re-fax the 160 pages all over again.

*You write your explanations, jump through hoops, and perform all that is asked of you. Your documents are not reviewed timely, and according to the mortgage servicer, have become stale dated.

*You are required to go through the process all over again through no fault of your own.

*Your assigned representative keeps changing or you are never able to speak to them which has been now proven to lead to denials by more than 2 times the rate previously thought in a research study that was just concluded from Fannie Mae: “Homeowners who dealt with a single person at their mortgage servicer were twice as likely to get a loan modification and half as likely to be denied one…suggests that assigning a distressed borrower’s case to a team of employees can be measurably less effective than giving it to one person…The CFPB’s servicing rules, which took effect in January, give servicers discretion to assign either an individual or a team to a delinquent borrower. The 2012 national mortgage settlement required the large banks to give borrowers a single point of contact…The study found that assignment to a “true single point of contact” leads to improved outcomes: 54.7% of distressed borrowers who went through the loss mitigation process with the help of single point person received a modification, compared to nearly 10% who were denied a modification and almost 13% who were still waiting to hear back for a solution…. a key finding was that borrowers who remembered being assigned to a single contact were happier with the outcome, compared to those who did not, because the contact explained to them why the servicer reached a certain decision….these borrowers were less likely to re-default on their modified loans. Up to 70.5% of them expressed higher satisfaction with their servicer, compared to 22.3% of those who did not receive support from a single point of contact.”

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LoanSafe Member
What about servicer abuse when there is no modification involved? Such as:

--constantly changing the name of the supposed actual owner of the debt
--refusal to provide documentation when requested
--intentionally misleading the consumer with incorrect instructions, such as "you must contact the original lender to get any documentation about this loan."
--refusal to properly investigate disputes
--willful violations of RESPA, like reporting on credit reports during the prohibited 60 day dispute period, etc
--inflated amounts claimed as owed
--falsifying documentation to create the appearance of a legitimate ownership
--constant contradictions from what the same servicer has previously told the consumer
--obviously bogus responses to QWR's, no due diligence on their part at all

I know that these are violations of several respective laws, but are these also grounds for a complaint with the CFPB as well? If not, what is the proper place to file these complaints? Thanks


LoanSafe Member
Oh, one more to add to that list....sending me someone else's documentation and payment histories. To date, they have sent me private documentation for four individuals that have nothing to do with me or this loan--different names, addresses, not even in the same state as me, account numbers, etc.