Poor Mortgage Servicing Leading To New Breed Of Predator?

On the Credit Slips blog, attorney Tara Twomey makes some observations on how poor mortgage servicing is paving the path for a new breed of predators and how little is being done to address the situation.

• [W]hen property values were appreciating rapidly, foreclosure rescue scams primarily focused on obtaining title to the home and robbing homeowners of their equity. Today with property prices depreciating and many homes already “underwater,” equity is no longer the game. Instead, rescuers have become high-volume, “loan modification specialists.”

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• The gist of the business model is that for a fee, which can reach several thousand dollars, these specialists will attempt to obtain a loan modification for the borrower.

• But why are homeowners giving their precious dollars to loan modification specialists when they should be able to obtain the same results for no charge?

For the answer to this question, and other observations, see Poor Servicing Paves the Path for Predators.