This may be small in the grand scheme of the economic collapse, but I think it’s worth highlighting anyway: While there are dozens of reasons people are getting behind on their mortgages and entering foreclosure, there are also apparently some who are facing foreclosure despite having made all their payments. You know, just for variety.
It goes roughly like this: A mortgage holder with an ARM calls every month, finds out how much she owes, and makes the payment. Then one day her servicer says she’s behind and owes a mysterious $1000 back payment. They won’t accept current payments until these invented “arrears” are settled, creating “real” arrears. They don’t back down even when the mortgage holder has all her receipts and first housing counselors and then Legal Aid lawyers get involved. They continue to call and harass for payment even after their foreclosure proceedings have been dismissed in court and they are facing counter claims.
This is a real case I’ve recently written about in Troy, NY, but I found numerous stories online about the same servicer, Saxon Mortgage, that sounded suspiciously familiar, along with a lot of talk of lawsuits.
Those of you who work directly with housing counselors: Has this always been going on, or are they getting away with this now because the scrutiny is all on loan origination and foreclosure rescue scams? Do we have fraud overload?