How Do Mortgage Servicing Companies Harm Homeowners?
Regardless of how reasonable a mortgage product debtors may have been offered at the time of closing on a house or refinancing, things can quickly go from bad to worse if a predatory loan servicing company is involved.
These corporations are contracted by large financial investment banks to receive payments on loans 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 mortgage they administer, which may lead to instances of corruption and fraud.
The servicing company eats up the equity by imposing miscellaneous fees, and then turns a profit when the house is sold on the market after a foreclosure auction. This results in higher, much quicker cash flow for the investors than if the mortgage was administered without abuse and paid off fifteen or thirty years.
