Mortgage Servicing

Companies that process mortgages on behalf of the mortgage holder, are known colloquially as “servicers.” Frequently, the servicer will be the only party with whom the homeowner has any contact. Abusive servicing can involve a variety of practices, some of which have resulted in huge financial losses for low-income homeowners. Recent press reports and litigation have documented widespread misconduct in the industry, including misapplying mortgage payments; hitting customers with bogus late fees and charges; prematurely launching foreclosure proceedings against homeowners; and “force placing” high-cost homeowners insurance on borrowers despite receiving evidence that the borrowers already had insurance.

Policy Analysis

Comments to the Federal Reserve Board re Truth in Lending – Interim Rule Requiring Notice to Consumers by Owners of Mortgage Loans, January 19, 2010 PDF 110KB

Home Affordable Modification Program: Borrower Notices Fall Short, November 16, 2009 PDF 112kb

Press Release and Report: Why Servicers Foreclose, When They Should Modify, and Other Puzzles of Servicer Behavior, October 20, 2009 PDF

Homeowners Need Mandatory Loan Modifications and Expanded Access to Mediation; Current Programs Fall Short, September 11, 2009 PDF 101 KB

Testimony of Alys Cohen before Subcommittee on Housing: Progress of the Making Home Affordable Program: What Are the Outcomes for Homeowners and What are the Obstacles to Success, September 9, 2009 PDF 1.19MB

Testimony of John Rao before Senate Judiciary Subcommittee: Mortgage Modifications During the Foreclosure Crisis: Is There a Role for Bankruptcy Courts?, August 20, 2009 PDF 69KB

Comments to the Federal Trade Commission regarding Advance Notice of Proposed Rulemaking: Mortgage Acts and Practices Rulemaking, July 31, 2009 PDF 1.5MB

Testimony: The Worsening Foreclosure Crisis: Is It Time to Reconsider Bankruptcy Reform, July 23, 2009 PDF 1.6MB

Testimony of Diane Thompson before the Senate Committee on Banking, Housing & Urban Affairs: Preserving Homeownership: Progress Needed to Prevent Foreclosures, July 16, 2009 PDF 1.5MB

Report and Press Release: Desperate Homeowners: Loan Mod Scammers Step in When Loan Servicers Refuse to Provide Relief, July 10, 2009

NCLC's Home Affordable Modification Program Recommendations, July 6, 2009 PDF 133KB

Letter to Treasury Secretary Geithner and National Economic Council Director Summers regarding loan modification program, March 25, 2009 PDF 83KB

NCLC's Home Affordable Modification Program Recommendations, March 16, 2009 PDF 150KB

Letter to Treasury Secretary Paulson regarding Implementation of the Trouble Assets Releif Program ("TARP"), November 20, 2008 PDF 182KB

Testimony: Is Treasury Using Bailout Funds to Increase Foreclosure Prevention as Congress Intended?, November 14, 2008 PDF 127KB

Letter re Section 102 of the Emergency Economic Stabilization Act of 2008, October 28, 2008 PDF 22KB

Failed Regulatory Policy, Not Low Income Housing, Cause of Mortgage Crisis, October 13, 2008 PDF 35KB

Letter to Congress on Public Interest/Main Street Principles To Guide the Wall Street Rescue, September 24, 2008 PDF 93KB

NCLC Testimony on the Implementation of the HOPE for Homeowners Program and a Review of Foreclosure Mitigation Efforts, September 17, 2008 PDF 171KB

Press Release: Civil Rights and Consumer Groups Respond to Takeover of Fannie Mae and Freddie Mac, September 15, 2008 PDF 418KB

Coalition Letter to the IRS Commissioner concerning Revenue Procedure 2008-28 regarding the impact of loan modifications on the tax status of securitization vehicles, July 15, 2008 PDF 128KB

Impact Litigation

Fairbanks Capital Settlement

Background Information and Resources

Glossary of Mortgage Servicing Terms: Helpful in understanding mortgage escrow statements, loan histories, and other client account documents.