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1. Sadly, this story is far too familiar.

   We purchased our home with a mortgage from Rock Financial about fifteen years ago. Back then, they dealt only in conventional mortgages and did their own servicing – in fact, their motto was “Your lender for life” with an strong emphasis on being a local company. How times have changed.

   Comment by Dawn McNeilly — May 13, 2008 @ 6:27 pm

2. This is becoming the norm, not the exception! Your “classic” case is the very same thing we experienced. Our Countrywide loan officer pushed us for refinancing twice and always with a secondary mortgage. The second time, we specifically asked for a 30 year fixed mortgage to get out of the adjustable rate payments. We asked many times for some idea on the closing costs and numbers, but we were never told any numbers until at the closing. We were surprised to hear from our loan officer that though I had a fico score of almost 700, we didn’t “fit” into a straight 30 yr. fixed mortgage. We were quickly rushed through the closing and now had, again, two mortgages with the second loan being an adjustable mortgage. We were told by Countrywide later, that it as actually cheaper to do the loan with this program. Suuuuuuurrrre.

   At closing, the loan officer wasn’t anywhere to be found and unavailable at the time to even take a phone call. We were also very surprised to hear, at our closing, that our home appraised for over $411,000, though we just couldn’t see where they got their comparibles in our area. We asked for a copy of the appraisal, but to this day they haven’t produced one. We were actually given a loan for far more than we asked for and was told to the second mortgage money was like a “checking account” and we could write checks whenever we needed the money.

   Soon after closing, our second mortgage rate grew by an alarming quarter per cent per month for months on end!!! It spiraled out of control. The harrassing phone calls from the Countrywide were very upsetting. They even called and talked to my secretary about my personal business. We called their so-called “customer counseling” hotline only to be repeatedly threatened and reduced to tears and hysteria. I was told by the counselors at Countrywide that if we didn’t pay up, we would be homeless, out on the streets, humiliated by foreclosure, that we just weren’t applying ourselves and much more. We tried to pay partial payments and they refused to take the payments unless we paid in large lump sums. It really has been a true nightmare.

   The only answer to this epidemic practices is for someone to slam down on these mortgage companies. It has reached an alarming and devastating level and it’s time for someone to step in!

   Comment by Jean — May 13, 2008 @ 11:10 pm

3. Let me first start by saying Rock Financial is known for this type of behavior. As you know I have expressed many time the lenders role in all this mortgage mis-rep. We continue to hear and read about how many families are in or facing foreclosure. Many would say it’s due to people purchasing homes they simply could not afford, others would say it’s the realtors, appraisers and the loan officers but I am waiting for someone to finally stand up and call the devil a liar. It’s the lenders!

   How could something like that happen? Here’s how–within the mortgage shop they meaning managers and account executives teach and train the loan officers how to throw the loan against the way and make it stick and win the trust of the borrower.

   I worked for Aurora Loan Services, a Lehman Brothers Company for 3 years and during that time I had to fight with account executives and loan officers, inside sales folks about doing what is best for the borrower. All I got from them was hey you get a pay check as a underwriter we are on commission only so hey what ever… We all no about “NTB” Net Tangible Benefit to the borrower test.. Aka will the requested loan transaction be a benefit to the borrower if not do not proceed with the loan. Well let me tell you the lender don’t care. If the borrower is willing to sign the loan documents and pay $15000 to save $50.00 per month let the punishment fit the crime.

   Yes taking the loan officers and account executives out of the game would hurt but its time for a level of control. Why would the person with the most to gain stop the transaction? Lenders make tons of money that’s why there in business, there not going to say don’t do that loan Mr. Borrower its not good for you and risk losing there $15000 of fee income. Let’s be real.

   What they will say and train there people to do is dress the loan up and will there questioned plead the 5th offer the borrower cookies, and pop corn and get the documents signed. Once there signed they have a processor or file opener /customer service person to take all the calls and hits. I have over a period of three year went to battle for borrowers and was denied promotions, and advancement because I would not play the game. I finally after years of dealing with it reported it to human resources, and managers were fired but the mis-rep continues. I am very sorry to read this story but I wish we as a group could take on the lenders.

   Now we the government bailing them out… And new company jumping up daily, running the same fraud thru Fannie Mae.. Once Fannie Mae’s stock bottom, maybe real mortgage reform will come.

   Thanks for reading

   More to come…

   Comment by Brad Ford — May 14, 2008 @ 11:03 am

4. The whole mortgage scene is very upsetting to so many of us, especially when people are crying out for help. In my condo village alone, there are 12 foreclosures, with one right next door to me that’s been vacant for over 1 year. The value was $125,000 & now the bank is trying to sell it for $77K & no one is even looking at it. I have 4 friends who are losing their homes due to the loss of their jobs in the automotive industry. I’ve been with the same automotive company for 32 years & it’s not good, every day your afraid that your job is in jeopardy & you could be next. It’s a very depressing time for the American people who really want to hold onto their homes & jobs. People reach out for help from anyone trying to offer a good deal, but little do they realize (until it’s too late) that they get conned; now the hole is deeper yet and getting worse. Good thing some of us still have our camping tents around just for emergencies!!!

   My latest issue is last year when LaSalle Bank sold their mortgages to Citimortgage (thank goodness they were kind enough to let our refinance rate of 5.5% remain) or I would be in deep trouble right along with everyone else. How can the banks do that? We never got a say in the selling of our mortgages! No more convenience of dropping off your payment at the bank on one of your two paydays per month. That “perk” is now gone. The closest Citimortgage is in Chicago or Ohio! And if you’re late – the fees are doubled & tripled! Who can possibly afford any mortgage these days. People are human & need real help & proper guidance. I know I’m frightened by the whole picture. I’ve been thinking about moving back to an apartment with no ties. You might sign a contract for 6-12 months, but at least you don’t have everything hanging over your head. If I could sell my condo, I would (even though I love the location on the creek with nothing but woods around me). I wouldn’t want to buy another home/condo. Too many issues & no one to help when you are hitting rock bottom. The US dollar just won’t stretch like it used to so we’re all in trouble!
   Karen A.

   Comment by Karen Alexander — May 14, 2008 @ 12:29 pm

5. A few yrs ago when I began volunteering for Homeowners Against Deficient Dwellings, (HADD.com), the builder complaints were almost always about shoddy construction and breach of contract/warranty issues. As the country got more into the housing boom/bubble and bust years, the complaints began to show more frequent elements of predatory or fraudulent lending, paticularly when the builder’s in-house or preferred lender was used. The last year or two it has really increased.

   Consumers were complaining about outright fraud committed by builders years ago. (E.g. the F. Jeffrey Miller case in KS that will supposedly got to trial in 2009 after something like 10 or more years of when HADD first became aware of it.)

   Only when banks and investors complain, is anything done. Now, too late for many consumers, there are finally some investigations going on by various govt agencies. Several big builders have been fined by HUD, some just this year. A few small crooked builders have already been sentenced to prison or are facing trials. Beazer is still under investigation by multiple agencies. What seems to happen when a BIG co is caught breaking the law is that they pay a fine without admitting wrong-doing. That was the case where HUD fined several builders millions earlier this year. These fines are nothing to building co CEO’s whose life styles will not change because of it. They may even go on doing the same things.

   But for the customers whose lives were turned upside down, they may have already lost their house and had their credit ruined. There is also, STILL, an unaddressed problem of severely shoddy new homes that can lead to foreclosure because of them being uninhabitable/unsafe/unfinished, even absent predatory lending! I have an email from a homeowner in 2001 about a case where 25 new homes were foreclosed on in a development because the ‘warranty’ was illusory and the homeowners had no legal recourse to really hold the builder accountable. I think more of that is going on than is reported in any public statistics.

   It’s simply wrong for these co’s to be able to “settle” and go on doing business as usual. It is way past time to hold corporate wrong-doers accountable in a MEANINGFUL way, and in time to prevent more housing industry disasters. I feel that jail time would be far more meaningful than fines that never really touch the people who call the shots at these co’s. What is really sickening is that the industry (housing, finance) can even get the time of day from Congress, on these various bailout deals. They should be going to jail or put out of business, not getting corporate welfare at our expense.

   Comment by CS — May 14, 2008 @ 3:02 pm

6. What a sad day in America when the government votes to bail out the criminals and let’s the hard working, honest, homebuyer who depended on the “professional” appraiser, realtor, lender, and title company to work for the customers best interest become homeless with their credit ruined maybe forever.

   There are CEO’s and other executives who belong in prison for the fraud that they knew was going on and ignored. Congress, the SEC, Treasury, FTC, and everyone in government HAD to know about the fraud and did nothing. I have many news stories going back to 2003 exposing the problems but Wall St. was making so much money no one did a thing to stop it. Now our entire economy is in jeopardy.

   I had solid proof of fraud in lending in 1999 and in spite of indictments in 2006 the criminals are still on the street doing business. The homeowners have lost their homes and any money recovered, if there ever is a trial, will go to the lenders, many of whom were involved in fraudulent lending themselves.

   Until someone can wrest control of our “democracy” from corporate America, ordinary citizens will have no voice. My fear is that corporate control is so complete today that the people will never again have a voice.

   There are a lot of wealthy people in this country who belong in prison. I won’t hold my breath waiting for it to happen.

   Comment by NS — May 14, 2008 @ 4:41 pm

7. In response to the comment of NS:

   “There are a lot of wealthy people in this country who belong in prison. I won’t hold my breath waiting for it to happen.”

   When we have corrupt courts as we do in Michigan, aiding and abetting construction fraud, mortgage fraud, etc.; where the attorneys go ka-ching, ka-ching, and the judges as in Oakland and Macomb Counties laugh all the way to the bank, the hard-working middle class person will be extinct in less than a generation !

   http://courthouseforum.com/forums/thread.php?id=1043068

   WAKE UP AMERICA ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

   Comment by GoodWitch — May 14, 2008 @ 6:05 pm

8. Ralph, I disagree with your overview of this situation. You are too quick on the trigger to call this fraud and crucify loan officers with your comment, “your loan officer is not your friend”. A very bold AND BROAD statement. If a realtor (singular) sold someone a home at a knowingly inflated price should we then say “YOUR REALTOR IS NOT YOUR FRINED”?

   Further, let me restate my position and feelings on the lenders mentioned here and in the comments. As you may well know from my posts and comments, I have no love for Qicken Loans, Countrywide, several Wall Street lenders and other institutions like WAMU and B of A. They all employed deceptive national advertising and lending practices. They taught their own staff of inexperienced loan officers what to say and what to do to get the loan. This from their own retail sales not brokered sales. Then to add insult to injury and to lay their “fraudulent” pactices off, they pointed their finger at the mortgage broker community, destroying it. WAMU and B of A no longer accept business from mortgage brokers and continue their “unfair” lending practices.

   Case in point, just walk into a B of A branch and look at their sign advertising a “NO FEE” 30 year mortage at 5.5% with over 2.95 POINTS. They assume the public does not understand points…and they DON”T. Almost 3 points to BUY DOWN the rate. If I advertised that as a broker I would be run out of town on a rail.

   That being said we need to keep stories like this fair and balanced.

   From what is written by Lisa, this is not as you put it an example of “CHURNIN:G”. At each refi, the borrowers GOT CASH OUT to pay down their other bills which in effect lowers their monthly cash outlay. Sure their mortgage payments went up but so did their loan amounts due to cash out.

   Not coming to the closing table with cash to close is the norm in a refi. IT DOES MAKE ECONOMIC SENSE and I would not advise a borrower to do otherwise. In many cases the cash is simply not available (as was probably the case here) and if it were, why deplete cash on hand when you can use equity preserving your cash for emergencies.

   As to your comment that without paying the closing costs in cash the borrower never knows what the loan is costing them is also a streteched generalization. The borrower signs SEVERAL copies of their HUD-1 (Settlement Statement) and most closing agents go through them very carefully.

   For those few bad title agents who do not and rush through a closing by simply saying, “sign here”, the BORROWER should stop and say, “what am I signing”?, “Can you please explain this to me?”

   The inference that the appraiser gave a “phony” appraisal is also unfair to state. All appraisals are reviewed by the underwriters and often they require a second appraisal. Yes, even those institutions mentioned did that. Again, I have found most appraisers that I have worked with over the years to be good, honest and proficient at what they do.

   As to overstating income and assets, we are not sure that this happened in this case but stated loans were and “still are” a generally accepted practice and is still being practiced by Fannie Mae and Freddie Mac. But again, we are not sure that overstating these items was the case here.

   At all levels of their transactions, there did seem to be an “economic” benefit to the borrowers. Even when the mortgage payments went up to over $1500, you must remember that they paid off their car loan ($359 per month and other credit card bills. Their total monthly outlay of cash was LOWER. This is an economic benefit. In addition, they built a garage which they WANTED and which did in all probability raise the value of their home.

   From what I see, the rates were all reasonable at every transaction. Their debt to income ratios were probably high and that is more important then having a high credit score.

   These people had limited income and by Lisa’s own admission (while in college) simply over spent.

   This is simply a case of overspending on an income that did not support that type of spending. Were it not for the cash out refi’s to pay off bills and cars, build garages and who knows what else, they could have kept their mortgage payments to the same level as it was initially, but even with that I don’t believe they could have continued the payments.

   Sorry Lisa, I don’t want to seem mean but I don’t think you are an example of fraud IN ANY WAY.

   There was

   Comment by Larry Rubinoff — May 14, 2008 @ 6:53 pm

9. This letter is from someone who sought out a lender to do a cash out refinace on their home 3 times in a 2 year period because they were spending more than they made. That’s the bottom line. This is the perfect example of someone using their home as an ATM machine.

   Mr. Roberts, I find your response extremely disappointing. Out of the literally thousands of stories available, you picked the wrong one to illustrate mortgage fraud.

   This was not an example of :churning”. Webster’s: to make (the account of a client) excessively active by frequent purchases and sales primarily in order to generate commissions. When Lisa and Peter were unable to qualify (probably due to debt to income ratios) for a fixed rate loan on their 1st refinance (late 2004 or early 2005) the loan officer but them into an ARM product with a 2nd mortgage to be used to pay debts down. He would have been remiss had he not told them that if they took care of whatever issues they had, they could be refinanced into a fixed rate. And, that is exactly what he did when they returned a year later. At this point, after 2 refinances, their payments total $919.94, just slightly over the $904 they were paying on their land contract. AND, they have realized at least $30,000 to pay consumer debt and other bills. But, they continued to spend more than they made, requiring more cash out on the 3rd refi even though their payments were going to increase by over 60%!

   There is absolutely nothing that indicates “coordination” between the loan officer and the appraiser. What, just because their value went up?? During that time period, values increased monthly. Loan officers and brokers always ordered the appraisals. The borrower is not allowed to order their own appraisal. Should the loan officer or broker use a new appraiser on each deal so they aren’t ordering from a “known” appraiser?

   Your statement that “your loan officer is not your friend”, in bold type no less, is irresponsible. There isn’t a single industry or business in the world where EVERYONE “operates with integrity”. The real estate and mortgage business is no different than any other. There are thousands of people that do conduct their business and personal lives with integrity and they are “at the core” your friend. This loan officer did nothing even wrong and certainly nothing fraudulent.

   I can empathize with Lisa and Peter D. having been there and done that. But, I did not blame someone else for the decisions or choices that I made. I really hope that Lisa and Peter can accept responsibility for their actions and work their way out of this. And, work is what it’s going to take. It will probably be the hardest thing they have ever done and will necessitate some major lifestyle changes, but oh, the satisfaction they will feel when it’s over!

   Comment by TANFWTL — May 14, 2008 @ 8:09 pm

10. One other thing. Why in the world would anyone bring cash to the table on a cash out refinance???? Are you saying that the only way someone knows what the transaction is costing is to bring these funds to the table? Do you honestly think that people aren’t smart enough to look at the line on their settlement statement that is headed “total settlement charges” during the 3+ days they have to look over the paperwork during their recission period? Peter and Lisa D. had the opportunity to go over the paperwork with their loan officer, in the comfort of their own home, and chose not to.

    Comment by TANFWTL — May 14, 2008 @ 8:44 pm

11. One of the striking things is a consistent innocent victim perspective of the poster:
    - Some entity known as “uninformed college spending” that attacks millions blemished their credit score
    - Irresponsible credit made available by credit cards
    - Vicious “refi / pay-off-credit cards / run-up the plastic / get an even bigger heloc-refi” cycle got the best of them

    I dont see how they were responsible for anything! Lack of personal responsibility seems to be the hallmark of our times. It is convenient to hide behind “oh we are so unsophisticated and cant read the documents” and get a car with payments, building a garage, doing home improvement projects, instead of buying a 10 yo used honda as a vehicle, and spending responsibly.

    Comment by Another Victim — June 22, 2008 @ 1:56 pm

12. I have an update for any of you who care.

    I filed a complaint against Quicken Loans with The Office of Financial and Insurance Regulations (OFIR) in April. We have gotten one answer back in June from Quickens, which we came back with a rebuttal in the same week. I haven’t heard anything from my representative from OFIR, Gina Bell, in some time. So I called her today.

    She apologized for the delay. She has been out of town and is behind. Gina Bell told me that Quicken Loans was suppose to get back to them to answer our rebuttal by July 16th. Gina said that she didn’t think that they had responded but she had to go through some piles. She did tell me that by law Quickens has to send me their response as well, and I have not received anything. So my guess is that they have not responded. So at this point they are almost 30 days late. Gina said that she was going to call me back once she finds out if they have responded or not. If they have not she would send another notice informing them that not responding would be breaking the law. This new notice has a seven-day period of time for Quickens to respond.

    Gina did also say that she had a contact at Quickens that she was going to call and bring to his attention that they have not received a response. I am now waiting for a call back from Gina. I really don’t understand how sending another letter can enforce things. I feel like if I missed a deadline by even a day my complaint would have been dropped. But this big lender gets such a window of forgiveness. I know some of you don’t think that there was any fraud done on our file, but even you could see how flawed the system is for us little consumers trying to get answers. Without help I would have thrown up my hands along time ago and just given my house to them.

    Comment by Lisa D — August 13, 2008 @ 4:09 pm

13. Good luck to you, Lisa. It can be a long and frustrating battle, and bureaucracy often makes it worse, before it gets better.

    Comment by Dawn McNeilly — August 13, 2008 @ 8:13 pm

14. Lisa, I do agree with the last comment in your post, the system is flawed. It was the “system” that created the opportunity for most of what has happened. It was the “system” that encouraged many actions and it is the “system” that is destroying our economy and the lives of our fellow citizens.

    The “system” giveth and the “system” taketh at will to suit “thier” needs.

    The “system” is not just flawed, it is broken. Only those in the hierarchy of the “system” are surviving and profiting. We, the average middle class citizen are not part of this exclusive club.

    Comment by Larry Rubinoff — August 14, 2008 @ 8:47 pm

15. I hope this advice is not to late but their is nothing dirty about the word “bankruptcy”. You could still save your house this way.

    But I’m warning you!!! Bankruptcy lawyers are here to make money also. When it comes to all of this, no one is your friend if they are making money off of you. Some are better at customer service than others but it’s all BUSINESS!!!!! The only one to trust is yourself and in so many of these stories people had “bad feelings” or felt “uneasy”. Trust your gut! If it feels wrong, it probably is.

    Comment by Col — September 10, 2008 @ 2:22 pm

16. There are other valid legal defenses to foreclosure that keeps you out of BK. BK should be the last resort after the legal defense is exhausted.

    Many foreclosure actions are being dismissed by the courts.

    Comment by Larry Rubinoff — September 10, 2008 @ 3:00 pm

17. So let me get this straight, you kept asking to borrow money to pay off other bills and that is Rocks fault how? If anyone was at fault it was you for not getting you bills under control and not Rocks. If you didn’t get the loan from Rock would you have sougth out the loan from another source. I am no Rock fan and I have a number of complaints but it is the borrowers fault not the lender. Did Rock have a gun to your head? No you seen easy money instead of a hard budget. Take responsibility!!!!

    Comment by Charles Runyon — March 20, 2009 @ 7:47 am

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