Mortgage Foreclosure & Refinance Resource

One problem is that mortgage servicers make their money from late fees and other penalties charged to borrowers.”There’s a built-in incentive for the servicing industry to really rip people off,” contends Richard Gaudreau, a Salem attorney who specializes in consumer bankruptcy law. “If they can throw your payment into a suspense account because it’s a dollar short, then they can impose a late fee.”

Maroney said some mortgage servicers should be prosecuted for their actions, which he characterizes as “fee-skimming.”

“If you manufacture a default, and you take somebody’s house, explain to me for a second why that isn’t theft,” he said.

In a recent telephone interview, Porter said the typical market constraints aren’t there to help consumers. “You don’t get to pick your servicer,” she explained. “I could refinance my loan, but I could still end up with the same servicer.”

“I wish this were just a one-bad-apple story. It’s not,” she said. “These practices are across the industry.”

And there is no single entity to handle consumer complaints, she noted. “Who your regulator is, or is supposed to be, depends on who made your loan and who currently holds your loan.”

If you believe you are having mortgage servicing issues, and/or to file a federal complaint, www.ftc.org

The full story on mortgage servicing firms can be found here.