The Dodd Frank Act is not just for the securities market and Wall Street Reform, but also for mortgages and the companies that make and service those loans. Whereas more than 73 pages of the Dodd Frank Act (roughly pg 773 to 850) was devoted to Mortgage Reform and Anti-Predatory Lending under Title XIV. Yet predatory lending, predatory loan servicing and abusive financial practices still exist. Sometimes it’s as simple as failure to respond promptly to requests about payment allocation errors, which at first may seem non-threatening and should work itself out, but it can tie up money for a long time or even cause problems with a pending foreclosure. Mishandling of escrow monies and abusive collection practices as well as illegal foreclosures still exist despite the Act being signed into law by President Obama in July 2010, with an encore of a suit filed at the federal level by the Department of Justice on 5 top companies in February 2012.
As a former Realtor, I know all too well about the rise of the real estate market and the creative financing going on at that time, followed by the bubble that broke and the collapse of that market. Now some of those companies who were riding high in the saddle then, now need to dump some overpriced debt on those overpriced and over-appraised homes, hence the predatory practices started again, but this time with illegal foreclosures. It appears that they need to free up those mortgage-backed securities so the income stream can flow again for the investors in those pools. I personally helped an 85 year old man save his house from illegal foreclosure and went through this process. Here’s a step-by-step guide on how to beat violating lenders at their own game.
1) Contact the Consumer Affairs Department in your state. Some states may call it the State Corporation Commission. Different states may call it by different names, but basically you want the state department that handles consumer protection for banks, mortgage lenders, loan originators, and sometimes even insurance. If your complaint is against a local bank then this Consumer Affairs will be a good starting point. If they are a national company like Nationstar Mortgage Holdings Inc. for one example or a company with the letters N.A. (national association) after the title, then you will not get much help here. Proceed to step 2.
2) Contact the Federal agency “Office of the Comptroller of the Currency”
1301 McKinney Street Suite 3450 Houston, Texas 77010
Toll free at 1-800-613-6743 or fax (713)-336-4301
Another agency that may be able to help is the Federal Reserve Bank, whereas the FRB along with the Comptroller both do the Mortgage Foreclosure Review. It’s important to note that if you have a mortgage from a national company it may still be exempt from either of these agencies if it is one of these 5 companies: Wells Fargo; Citibank; Bank of America; Ally/ GMAC; or JP Morgan/ Chase. In that case, you will need to contact the agency that specifically handles these 5 companies known to be abusive predators and proceed to step 3.
3) Contact the “Consumer Financial Protection Bureau”
P. O Box 4503
Iowa City, Iowa 52244
1-855-411-2372 (phone) or fax 1-855-237-2392
Do not stop here, because there is more work to do. The CFPB tracks complaints and companies, but they can’t actually make the nasty mortgage companies stop from being nasty or predatory or even stop foreclosure. They can fine the company or if there are enough of the same kinds of complaints on the same company they can institute a class action lawsuit. This takes time and may not even make you feel safe or protected whereas foreclosure can still take place and a fine on them is good for later, but is no consolation to you for the immediate problem. Make sure you are assigned a case number and write it down. If you try to add info to your case later, please note that no additional information you provide will be reviewed or passed on to the mortgage company you are fighting, so be very exacting and succinct about your claim and give them everything they need upfront (not later). The only time they will pass on new information and not treat it as a duplicate is if there is a separate issue and that the new claim is not merely supportive evidence for the first claim. You will also want to approach most of the items 4 through 8.
4) If it is an FHA loan, you will need to contact the (HUD) Housing Urban Development’s contractor at the NSC Hotline. Currently that company is Deval, LLC, which took over from its predecessor C & L Service. These types of FHA loans are called Secretary Held Assets and include but are not limited to HECM mortgages, Section 235 subordinate mortgages and Nehemiah subordinate mortgages.
HUD’s Contractor Deval LLC
1255 Corporate Drive, Suite 300
Irving, TX 75038
Toll-Free: (877) 622-8525, Fax: (469) 647-4451
It is important to note that not all of Deval’s employees know how to handle a Reverse Mortgage (HECM), and there is but a mere one or two employees within Deval that have the expertise to discuss that, so be preparred to get transferred to a Home Equity Conversion Mortgage (HECM) loan specialist within Deval. Regardless of your type of loan, note that Deval has a really bad habit of NOT listening, over-talking the customer whom is in need, and just transferring you before hearing what you have to say. You may want to consider faxing them and labeling the fax cover sheet with the “to” line addressed to “Deval LLC (Texas)” – FHA loans. Since their track record is not all that good, you may fair better contacting the National Service Center in Oklahoma with a HUD specialist employee at the info below.
5) Contact the U.S. Department of Housing and Urban Development at:
HUD National Servicing Center
2 West 2nd Street, Suite 400
Tulsa, OK 74103
Phone: (800) 594-9057 or (918) 292-8900
Fax: (918) 292-8984
Keep in mind the National Service Center (NSC) Hotline in Texas with Deval is not the same as the NSC in Oklahoma with HUD. You could of course contact both, as I am of the firm belief that the squeakiest wheel gets the most grease at least when it pertains to HUD anyhow. If you are not getting the attention you deserve or if nothing is getting done by either HUD or Deval, then you should contact HUD’s Office of Inspector General (or OIG). I would not use the contact method by phone to call HUD’s OIG as it is the same phone number as the main hotline number for HUD’s “Fraud, Waste and Mismanagement”, which is not all that helpful. That number guides you to press one for this, and press two for that with recorded messages, but you don’t get to talk to a human and most of the time it just refers you to another number to call. If you are going to reach out to HUD’s OIG, then consider a fax, a letter through the mail, or using the online complaint form or an e:mail, but using their phone number is a waste of time.
6) Many US states have services that the state Attorney General’s office provides. This is not the district attorney in your city or county, but the attorney for the state, and sometimes they will use the abbreviation OAG for Office of the Attorney General. Some OAG offices refer you to a state Consumer Protection Bureau, but some OAG offices will be hands-on and help in contacting the Dodd-Frank violator with the contact they have. That’s because 49 of the 50 states had pro-active Attorney Generals that helped the U.S. Department of Justice (DOJ) reach a $25 billion agreement with 5 of the largest national mortgage servicers to address foreclosure abuses and mortgage loan servicing problems.
7) You should also contact a Congressman for your state, and I do not mean at the state level for the general assembly, but instead a federal congressman being either a US House of Representatives or a US Senator. Many of these congressmen have constituent services they provide including help with contacting a federal agency like HUD or at times will contact the mortgage company on your behalf to assist you with your problem. Some congressmen however, do not like it when you have contacted several congressmen as it repeats steps and slows the process. Sometimes they will require a Privacy Release Authorization to accompany your complaint.
8) I would not start with the Better Business Bureau, but I wouldn’t leave them off the list either. You can do this by phone or online and those numbers are different depending on the region of the country in which you live. Keep in mind, you may start in one area, but certain complaints like that of Dodd-Frank violators may end up being forwarded to another area. The main website URL is http://www.bbb.org/
9) If your loan is not FHA, but is a Veterans Loan, then after step 3, skip steps 4 and 5 and continue with steps 6 through 9. You may contact the U.S. Department of Veterans Affairs by phone, fax, e:mail, regular postal mail or by using an online contact form. You may want to call first before generating a lengthy letter to mail, just so that you have the correct department. The best place to start your complaint process is at the VA Office of Inspector General (OIG) at: http://www.va.gov/oig/hotline/
Note 1: If you choose your contact method to be an online form, then note that some websites prefer the use of Google Chrome browser over Internet Explorer for best results.
Note 2: The Office of Thrift Supervision under the U.S. Treasury no longer exists and several agencies have now merged since the Dodd Frank Act of 2010. The offices on this page have been verified and were correct as of 12-13-2013.
Disclaimer: This is not intended to be legal advice, and you may still have to contact an attorney, if the above measures do not work to your favor.