How EMC, FDLG and mortgage servicing madness altered my life -forever.
By Guest Blogger: Tammy Cothran ...
I am a hard working American, born and raised in this great country; a country that prides itself on having a wealth of opportunities for anyone. Yet, where I stand now, I have no control of my future because of the illegal and fraudulent ways of others. Abusive and illegal practices that the government seems to have knowledge of yet chooses to ignore.
I have posted my story on several internet blogs, have gathered endless amounts off information, and after finding countless others with similar stories as mine, I have renewed faith in "help thy neighbor" and began voicing my concerns and outrage over what's happening to innocent homeowners. I have been to our state's capital to tell my story to a senator, a house representative, and Governor Charlie Crist. I speak on the telephone with others and exchange information and ideas. I complain! I complain! I complain! I have become an activist fighting to stop abusive, illegal and fraudulent practices leveled at the American public.
My name is Tammy Cothran, and this is my view on the mortgage and foreclosure crises -and how it has changed my life, forever;
For most consumers The 'American Dream' has now become the 'American Nightmare'. It is no secret that the housing bubble era, going back to as early as 2000, grew significantly in just few years. This growth was fueled by investors who were looking for a place to put their cash they had pulled from the declining stock market. Many began investing in the popular mortgage backed securities, also known as toxic loans. Therefore, lenders loosened their standards to appeal to a wider array of consumers. They began to lower their qualifications for obtaining a mortgage by allowing those with less than perfect credit to obtain one. The lenders became very creative with their services by adding such enticing proposals that included offers to obtain a mortgage with little or no money down, time constrained fixed rate loans (usually 5 to 10 years), lower interest rates, two or three mortgages per property, and not requiring borrowers to verify their incomes (a.k.a. "No Doc Loans").
This trend worked its way to the real estate agents, the mortgage brokers and lenders, and the real estate appraisers in 2005. One entity had to feed off the other to become successful, even if only for a temporary self-sufficient elation. Although most believed this bubble would last for a few years, very few thought through the ramifications in the event of an early burst. Yet the knowledgeable Wall Street players, large lending institutes, and lawyers were already planning for the inevitable. They knew the housing market would crash, they just did not know when that crash would happen. Many believed, as in years past, the housing market would remain on an incline for several more years. That is, a few more years for investors and the like to grow their riches from unsuspecting consumers.
Real estate agents were offering incentives to buyers. Appraisers were over stating the value of a home. Mortgage brokers were becoming extremely creative in configuring loan packages. And lenders were qualifying borrowers with little or no credit, money, or suitable employment, hence the subprime loan. Homes were not on the market long enough for the ink on the sales flyer to dry when they were being sold. Consumers were purchasing three and four properties, most were unfinished homes, in the hope of 'flipping' each one for a huge profit. After all, with the price of homes rising on a daily basis, how could you go wrong with buying a home with just a few dollars as an Earnest Money Deposit and putting it right back on the market within a few days at a higher price then you purchased it?
What many did not know or realize was with each mortgage loan that was acquired; those loans were put in a 'pool' (let me point out that most of the small lending companies are now closed down, whether their demise was caused by illegal activity or simply closing their doors with no advanced warning, not even to their employees) and sold to investors from around the world. The investor(s) may have been large corporations or your next door neighbor. It is difficult to find the person or company that may own your loan. Of course, the SEC (Securities Exchange Commission) states that they were regulating all of the pooled loans, yet nobody seems to know just who it is that own these loans. (This also raises the question as to who has and where is my personal identification information.) As these were immediately sold, usually prior to your signing of the closing documents, the servicing of the loan was assigned to a mortgage servicer. In our case, it was EMC Mortgage Servicing - owned by Bear Stearns.
This circle kept going around and around until the day the government chose to bail out Bear Sterns and Lehman Brothers. Only to be followed by another bailout of AIG. This $700 billion bailout has grown, at the latter part of 2008, to an estimated $8.5 trillion. Why would the government want to bailout two of the largest lending associated companies? Because Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke convinced the Senate Banking Committee that if the bailout did not happen quickly, within hours, the United States of America would no longer have a profiting financial economy. It was stated that if the committee did not agree to the bailout of Lehman Brothers and Bear Sterns, we, as Americans, would no longer have a financial stake in the world. In essence, they were, in my opinion, trying a scare tactic with the government. And it worked. Bear Stearns was rescued by the Federal Reserve. The Federal Reserve then agreed to a 'stock swap' with JP Morgan Chase for a mere $2 a share when just less than a couple of weeks prior, Bear Stearns stock was exchanging for more than $171 a share.
The intention of the government bailout was to help stimulate the economy and avoid the collapse of the housing bubble. This was also promised as a preventative measure aimed towards preventing the severe destruction of the consumer's personal credit. One problem; it backfired on the government and the law makers. It appears to have only helped the large banking institutions by way of allowing their executives to pocket a more lucrative rate of pay and did little to nothing to prevent harm to the consumers. The local, state, and federal governments are inundated with powerful lobbyists targeting Senators, House Representative, and those at our State's and Nation's Capitals. There are many lobbyists readily available to pitch their 'reasons' to our law makers as to why the bailout was crucial and why they should not be held accountable for the amount they received. These lobbyists are also extremely powerful in ways that allow our elected officials to put the consumers on the end of a rope with not even a knot to hold on to through their contributions to the law maker's campaigns.
Who is speaking for all the wronged consumers?
Florida's law makers recently brought to the table a bill that would reverse the judicial allowances of foreclosure. At this present time, Florida is a judicial state. Meaning, if you are facing a foreclosure, you, as a consumer, have the constitutional right to a fair hearing and/or trial within our court system to state your case concerning the reason why foreclosure should not take place. By changing this law to a non-judicial state, it would change the constitutional right of the consumer. The bill would essentially allow foreclosure mills, lawyers, and lending institutions the right to foreclose on your property without allowing you your right to due legal process. How can this happen? Why would they want to take our constitutional rights away from us?
The banking industry is proclaiming that by allowing the large amount of homes on the market that are in foreclosure, for which most have been abandoned, is stalling the economy. If the courts could allow a foreclosure to take place without giving the consumer and/or homeowner their rights to fight the foreclosure, this would allow the empty homes to be sold, therefore, stimulating the economy. There is a catch to this; the consumer would still have the right to their day in court, for a fee of course. Makes sense, right? Of course it does. However, like most others in the same situation as myself, my problem is not the issue of the abandoned homes; it is the issue of MY constitutional rights. Our nation's constitution was written for the people to protect the people. Not the greedy CEO's and government officials of our land.
President Obama has tried to help by initiating programs to help the consumers who are at risk of default or are already in default. These programs, again, funneled money to the banking industries. They were given extra money, on top of the money already received through the bailout in 2008, to assist homeowners with revised loans, forbearance agreements, and several other options. The problem with these programs are the mortgage servicing companies, who have had the loans from the time of the closing, are not legally allowed to lend money or renegotiate loan terms due to the Truth in Lending laws. Then why were they given extra money? No one seems to be able to answer this question. Consumers are eagerly submitting, at the request of the servicers, document after document after document to the servicers in hopes of having to ward off a foreclosure and to keep their credit scores within a good range. The homeowner is doing what they feel is the correct moral and ethical thing to do; avoiding a dire situation with proactive initiatives.
How many times should you have to submit your papers only to be told they (the servicer/lender) did not receive them or they are working on the modification or some other reason why the servicer is stalling?
There are millions of scared homeowners that keep sending and calling and sending and calling, in hopes that their loans can be adjusted, if only for a short amount of time - time that would allow them to stay in their homes, and not on the streets, until they are able to reformulate their own finances. This eventually ends in heartbreak and frustration on the homeowner's part. They are eventually told, after many months, they don't qualify for a program for one reason or another. They are now back to square one; scared, mad, mentally frustrated, and physically drained with no hope within the near future. By now, most simply do give up and leave their property that they have worked hard for and are proud of.
This is when most people would simply give up. They walk away from their homes and allow that home to sit empty until it goes on the auction block. They picked up what was left of their sane lives and moved on. They moved on to what was to be a fresh start, no matter what the past had delivered to them. And, they thought they prevailed. Within a couple of years, these unsuspecting previous homeowners are sought out by the original lender and the process starts all over again. Yes, it is true. The original lender can, and will, hold you to the loan amount in which they approved for your home purchase. And you are liable for it. Remember, the foreclosure mills and servicing companies have no real stake in your loan since they do not have the original documents.
Most people mistakenly judge those of us who are in foreclosure as being lazy, buying more than we could handle, or simply feel as though we should no longer pay on a house that has declined considerably in value. However, these people don't know our story. Yes, mine is a story. It started as a situation and has become a way of life for us. I do not doubt that there are some that bought more than they could pay for, lied on loan applications, or simply did get lazy and gave up. And there are those that truly have been hit with a hard situation - loss of a job, health reasons, etc. But, my husband and I are not one of those consumers.
At the closing table in December 2006, we were informed that EMC Mortgage Servicing was the company in which we were to make all mortgage payments to. We hadn't even made our first payment when I noticed that EMC had billed us for escrow payments (homeowners insurance and property taxes). I knew this was inaccurate as we had not established an escrow account and our paperwork documented that. When I called to inform them of the incorrect bill, I was shocked to learn that I was liable for the billed charges until the matter could be corrected. And that of course could take 60 - 90 days. The overcharged amount was nearly $500. I was told by EMC the closing documents they received didn't show we were set up on a non-escrow loan. This was quickly corrected after sending documents to them four times. All was well until January 2008. I, again, noticed we were being charged for escrow. I called EMC several times each month after that to rectify this charge. I was promised a call from a representative when the situation was corrected and also promised that my mortgage payments would be applied correctly. So, all was well until six days prior to Christmas 2008 (11 months after the discovery). We were served with foreclosure papers.
I called EMC the following day and spoke with their insurance department. They finally explained what happened. And remarkably, they informed me that although I did not cause this situation, unfortunately, we would have to pay the price for it! Wow, what a shock. Luckily I was given permission to record this conversation. They suggested a Deed in Lieu of Foreclosure or a short sale. In doing either we would have been given a tax form 1099 for the balance of the debt that was forgiven. And all the while, the lender can claim that unpaid balance on an insurance policy. Isn't that 'double dipping'?
We were sent a forbearance agreement. At our lawyer's advice, we declined to accept it due to an unexplainable 'balloon payment' requiring us to pay nearly $5,000 in six months. EMC would call us daily to harass us about the forbearance. Those calls finally stopped and they declined our payment and sent it back to us.
This is when my investigating skills were sharpened. I have looked deep into the mortgage crisis only to be astounded by what I learned and the lack of remedy for it. In the process of my personal investigations, I began to become angrier than I had ever been. I realized that we were jilted by the American Dream and the greed of the industry. These feelings quickly turned into a 'don't mess with me' attitude.
We filed for a dismissal due to the fact that (and this is tied to the securities bundles) we were being sued by a bank that was in no way associated with our loan. Our original loan was approved by a company that is no longer in business, we have been sending our payments to EMC Mortgage Servicing, the legal papers are being sent by Florida Default Law Group, but we are being sued by Wells Fargo Bank.
Where, when, and how did Wells Fargo Bank obtain the rights to our home?
These 'legal' documents were, and still are, being produced by a foreclosure mill; one of Florida's largest mills, Florida Default Law Group.
As the court date got closer and my endless hours on the computer were coming together, I filed for two things from EMC Mortgage Servicing and Florida Default Law Group. The most important thing I wanted to see was the Original Blue Inked Signature Note for which FDLG states they have possession of. Well sort of: they did ask the courts to re-instate the note as the original note was not in their possession due to loss or misplacement. Huh? How can you threaten to take our home when you have NO rights to it? You do not have the original paperwork nor do you have anything showing that WE owe YOU. I also requested a complete and true copy of our account history. I got a copy of 'something', I just am not sure it is true and correct. As a matter of fact, I am not sure an accountant could decipher what it is.
Luckily the judge sided with us, temporarily, concerning the original documentation.
Could it have been due to the fact that I 'accidentally' stated during the hearing the conversation that I have recorded? Maybe - maybe not. There is a chance that the judge truly will not be bullied by the foreclosure mills and the lending institutions, and will adhere to the laws of our land.
The judge informed FDLG that they must produce the original paperwork in his office within 15 days. That was July 2009. To date we have not heard a thing concerning our case, but we have had daily collections calls - sometimes more than once daily - from the servicers in an attempt to bully us with harsh tactics and fraudulent documents. These customer service reps truly need a lesson in the power of positive and friendly speaking. Don't threaten me, please - that only make me more determined to not succumb to your tactics.
I have spent the last year and half, almost on a daily basis, researching and gathering my own ammunition for when that day will come that we must stand in front of a judge and state our case as to why/how EMC or FDLG has produced fraudulent documents and foreclosed on us illegally. After all, we were current in our payments. So why did EMC decide to foreclose on us?
I have realized that lenders and servicers make more money by causing loans to go into default. There are legal fees, late fees, administration fees, fees for this, and fees for that. Therefore, the servicers make more money from you (for their pockets) if you are in default than from those that make their payments on time.
There are several ways we can break free from the wrongful stigma and undue stress caused by this foreclosure. We could walk away with our heads down and be defeated, we could file bankruptcy, or we could easily give in to them and do as they say. But why should we? After all, we didn't cause it. I live on principles and have always fought for the principle as I see to be correct. I can not, and will not, allow someone to destroy me for the lack of their legal, ethical, or moral standards, or to simply line their already bulging pockets. Yes, this fight comes at a price. We live in fear of them coming into our home and putting our belongings in a dumpster when we are not here. We have fought amongst ourselves, blamed each other for what happened, questioned our personal integrity, spent many sleepless nights by tossing and turning, and suffered the destruction of our once exceptionally great credit rating. Our health has declined due to the stress of this.
But I will not give in to their threats. I have found fraud laced throughout their documents. Oh, but this is the new trend of these foreclosure mills and unethical lawyers. It doesn't take much time to do a simple research on the internet to show the ways in which these companies are operating. The key is to stay one step ahead of them. And I am doing just that. I have an entourage of online and internet blog site buddies. We must help one another and look after one another. After all, no one else is.
Complaining to our government fell on deaf ears. I didn't complain just one or two times, I complained all the time (so much so that it literally consumed my every breath). Local, state, federal, and any other office I could find. I faxed the White House daily for nearly 5 weeks. Finally I received a response - they sent my story to another agency. That turned out to be a bust. So, I complained again and again. Why? Because if I don't do it - who will? I have to fight the good fight, the legal fight, and continue to fight for my rights and the rights of others.
Ever wonder why we now live in a world where Certified Fraud Examiners are making a lucrative living? What has happened to the laws of our land, our morals, and our ethics? Have we become such an arrogant society that we must literally cut the throat of our neighbor to have one thing more than him? Is it okay to steal from someone to better yourself? Oh how the questions could continue.
The tides are turning. The lending/servicing companies, their lawyers, the foreclosure mills, and their constituents may have started with a ripple, but the consumers are now playing the game with them. There is now a surge of honest Americans that will no longer allow these people to drown them with their ways. They are allowing their voices to be heard with a loud roar.
As I said in the beginning, I am a hard working American, born and raised in this great country; a country of which boasts with opportunities for anyone. Yet, it's been a horrible wake-up call to learn that innocent lives are being turned-upside down due to the illegal and fraudulent ways of others. I speak on the telephone with others and exchange information and ideas. I complain! I complain! I complain! I have become an activist who wants to find effective change. And I hope you do too.
For more info about mortgage servicing complaints see earlier blogs.