Profile: alpha squirrel
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REO and Force-Placed Insurance are 2 different products. The REO policy shouldn’t have a borrower’s name as the beneficiary because it is placed on a property post-foreclosure, however, you are 100% correct that these policies should NOT be charged to the borrower’s escrow account (which they currently are), and a borrower should NOT be held responsible for any REO charges whatsoever. Currently, escrow accounts are systematically added to EVERY foreclosure. The point it happens is dependent on the state and whether the lender is FNMA, FMAC, or other. These illegally created escrow accounts are illegally saddled with exorbitant MONTHLY REO premiums, which end up being charged to the borrower, NOT the lender.
This is also an example of rampant racketeering and mortgage abuse,… more »
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This addresses nothing in my example. They notified me of LMO’s but then hid the fact they applied extra risk percentage of 2.5%, meaning the NPV caluculated by my using the HAMP site did not match the NPV value they came up with, since Wells Fargo was adding unbeknown to consumers 2.5% risk to the prime.Telling them all the LMO’s means nothing if they do not have full disclosures on the numbers used in the NPV model their calculations, and their deteminations. They should not be able to disqualify anyone from a LMO unless they fully disclose all the calculations used to determine that disqualification.
1. This rule only works if there are requirements to notify on denials, with harsh penalties for failure to send notice of a denial timely, including loss of right of forclosure for a proscribed period and that the clock would not start until person was sucessfully contacted via certified signature required mail.
2. Servicer denies appeals as a rubber stamp of their own actions. Does nothing. Should be requires that all LMO’s have an appeals process, if one is offered.
3. Borrowers Rejections must have ample time to evaluate the situation 48 hour decision windows, on real estate transactions like your primary residence should not be allowed.
4. This should also have an appeal window.
The lender should not be able to place forced insurance and replace the primary titled owner as the beneficiary of any loss policy issued on an pre forclosure asset, until forclosure occurs, the DEED is and remains in the ownership under homestead laws of most states, the borrower’s legal property.
I can understand the insurance requirement.
The borrower should not be required to assume debt, that defies market logic,and then be liable for that debt being issued when they can derive no direct benefit from it, not even policy ownership.
Also the lender should be required to obtain insurance at prevailing fair market insurance rates the regular consumer pays at the very most, when I was forced into REO due to default, and on medical disability, the monthly insurance cost was… more »
Which had also had additonal riders including liability umbrellas, for my auto and additional personal medical for visitors, comprehensive platinum content coverage, it belies common sense that they be allowed to fleece and abuse already indigent homeowners, like that. Charging 3 times what my full policy costs in a year, in a single month, and not even convering the whole contents of the house.
They should have to use and provide traditional carrier insurance throught market channels at prevailing fair market insurance rates for the property, the policy should be CO-owned with both borrower and lender listed as beneficiaries of any REO policy especially if being billed to the escrow account, anything less is the abuse of the fiduciary of escrow.
Also the whole risk thing of blind insurance, who are they kidding? I had no problem blindly insuring my house with my current carrier from six states away, in fact they knew the number of claims ever filed on the property being insured as well as any claims I had filed on the property I owned prior to this one.
All of this over inflation claim of excessive risk on REO insurance is a scam designed to insure they overcome the bankruptcy discount on cram downs. It prevents qualification for LMO’s prevents curing of default as well. There is NO reason for it. « less
The partial payment issue is a tricky one, they should be required to accept and post partial payments, becuse it reduces the amount of interest and other charges on the loan especially for FHA and other govt backed loans. Their failure to accept partial payments maximizes their insurance claim to the govt. There is no way this should be allowed, if you want govt insurance of mortgage loans, then you the lender must accept and post every dollar to that loan before, you would be allowed to make any claim, any lender not doing that should forfiet their right to make a claim on a govt backed mortgage, failure to do that after they received bailout funds from the governement means they are only interested in maximizing their profits and reducing their risk completely at the taxpayers expense. They… more »