Mortgage Servicing Abuse and Improper Foreclosure Sales
Regardless of how realistic a loan product homeowners may have been given at the time of purchasing a house or refinancing, things can quickly go from bad to worse if a predatory loan servicing company is involved.
These companies are contracted by large financial investment banks to receive payments on mortgages and keep track of all of the costs, as well as proceed with a foreclosure if need be. However, their first task is to maximize the profit of every loan they service, which may lead to cases of corruption and fraud.
The servicing company eats up the equity through miscellaneous fees, and then turns a profit when the home is sold on the market after a foreclosure auction. This results in greater, much quicker cash flow for the investors than if the loan was administered legitimately and paid off fifteen or thirty years.
