Mortgage Loan Servicer Violates Code of Ethics

by Pat K. from Avon, CT and by Sean from Philadelphia, PA

Ask Kate when your mortgage loan servicer violates the code of ethics: Step into Pat's shoes. You suspect your mortgage balance has been inflated by $80,000. Yet the loan servicer claims they are not responsible for the calculations. Where do you turn for help?


Ask Kate: Mortgage Loan Servicer Violates Code of Ethics

By Pat K. by Avon, CT

Mortgage Loan Servicer Violates Code of Ethics
Hi Kate,

I have been trying to get a modification from my mortgage servicer for over two years now. There always seems to some mistake in their paperwork.

Recently, they sent me an approval letter stating that I was approved for a mortgage modification that would eliminate $186,000 of what I owe. Sounds good right?

However, in my numerous years of dealing with this mortgage servicer I have noticed a troubling pattern of questionable business practices. For example, they will Never answer any of my emails. Their response to every email is 'call me' even to the most simple questions. During these calls I have been given information that later turned out to be untrue.

So they have advised me on the phone that this modification offer is a HAMP Streamline modification. However, when I calculated what I should owe after eliminating $186,000 of my arrearage, I reach a mortgage principal of $310,000, but their document states the principal will be $390,000. When I question them about this discrepancy they claim this was calculated by HAMP and they don't understand the calculations (of course they only tell me this on the phone.)

When I try to get them to confirm via e-mail that this is a HAMP modification, their answer is 'call us.' Since they won't put anything in writing I suspect this is not a HAMP modification, but instead an in-house modification they dreamed up and that is likely why the principal balance is $80,000 more than it should be.

Is there any way I can force them to put things in writing and to explain the calculations behind the modification?

***zz-portrait-left.shtml*** Kate's Answer: Mortgage Loan Servicer Violates Code of Ethics

Hi Pat,

Thank you for shedding light on the continued frustrations of homeowners who struggle with corruption in mortgage loan servicing.

Is There Any Truth in Mortgage Lending?

Your letter leaves me asking myself these questions...
  1. Where can average homeowners find help when they suspect a loan servicer is embezzling $80,000 of their principal reduction? See more at... HAMP Loan Modification: Principal Forbearance vs Principal Forgiveness.

  2. How can average homeowners fight back against mega lending institutions that follow a pattern of unreliable, verbal-only communication? See more at... How to Convince Your Bank to Modify Your Mortgage.

  3. Who will assist average homeowners in forcing loan servicers to be truthful about the loan programs they provide? See more at... HAMP Loan Modification Scheme Exposed.

Who Can I Contact to Report Mortgage Injustice and File Complaints?

Here are my suggestions. I often post a list of government officials and how to find them, a cheat-sheet as such, to reduce the time it takes to report mortgage injustice and file complaints. See my list at How to Contact Washington DC, Your State Government, and Other Bureaus.

But in addition, I'd like to re-visit NACA, the Neighborhood Assistance Corporation of America. The NACA organization is a non-profit, community advocacy with the primary goal of building strong neighborhoods through affordable mortgage financing. Best of all in my opinion are their campaigns for justice on behalf of struggling homeowners and home buyers.

NACA Junk Yard Dog Approach: Never Letting Go

See their junk yard dog approach to identifying the institutions that refuse to respond to the needs of struggling homeowners and home buyers...
NACA has taken on the largest lenders in the country and won. When NACA takes on a fight we take the junk yard dog approach 'once we grab on we never let go no matter how long it takes'. We believe that powerful people and decision makers of (mortgage) companies need to be held personally responsible for their decisions that exploit working people.

Where Do I Find NACA, Neighborhood Assistance Corporation of America?

Great info, Kate, you might be thinking, but where do I find NACA? Homeowners can call NACA's Home Save Department at 801-401-6222 to talk with a housing advocate. In your case, Pat, you will find them in Connecticut at 241 Main Street, Hartford, CT 06106. If you prefer to call, their local phone number is 203-562-6220.

You might remember that I wrote about NACA after Chris C. from Detroit, Michigan first brought the organization to my attention. Get my overview on the NACA campaigns for both homeowners and home buyers at NACA Approach to Loan Modification and Home Buying.

Pat, I'd like to know of your progress and look forward to hearing back from you. You can post a follow-up by clicking the link near the bottom of this page which will allow you to add a comment to this letter.

Best wishes,


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Trying to get released from a Wells Fargo mortgage
by: Sean from Phila, PA

Hi, I bought a property back in 2007. In 2011 me and my partner split up. We owned the property together. She wanted to stay in the house even though the mortgage was past due to Wells Fargo.

I signed the loan modification paperwork and she continued to live in the house. She fell behind the mortgage again with foreclosure proceedings starting in 2013. I agreed to sign the deed over to her and Wells Fargo was suppose to release me off the loan after the 2nd loan modification. She was dealing directly with Wells Fargo the whole time, I had no contact.

The loan modification was completed in her name and then a 2nd lien was created to HUD for all the past due amounts from the loan modification in her name. We applied for the assumption and was denied because Wells Fargo said the 2nd lien to HUD needed to be paid off which is 16k.

If we had 16k we wouldn't be in this spot in the first place. Also the approval is based on creditworthiness which she has none. So I am still on the first mortgage which has been current cause she is now renting the property out. I am unable to obtain another mortgage due to high debt-to-income ratio because I on still on this mortgage to Wells Fargo.

I filed a complaint with the CFPB, which was basically a waste of time. I spoke to an attorney and he said that since there was no written agreement to release me off the mortgage once the loan modification was complete there is nothing I can do from a legal standpoint.

I feel like I was completely deceived. I otherwise would of just let the house go into foreclosure and not signed anything. I have asked her to try and refinance with her new husband but have not really got a response back. There might now be enough equity anyway.

Is there anyway I can hold Wells Fargo accountable and force their hand to release me from the mortgage.

Hi Sean, Kate here... Whew, I agree. Your mortgage has become a tangled mess.

I don't know if Wells Fargo can be held accountable or not. The big banks are slippery, as you know. I suggest you call one of the free HUD-approved housing counselors who are available 24/7 and also peruse the letter to Pat (see above) for more sources of assistance.

The contact information for the HUD-approved housing counselors including tips for making the most of your time with them over the phone can be found at Free Making Home Affordable Housing Counselors.

Very best wishes, Kate

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