While the Government is Filled with Bankers, Lawyers and Real Estate Investors, the People Will be Evicted Illegally from their Homesteads

NO ONE TOLD Deanna Walters she was about to lose her home. Not when her mortgage servicing company foreclosed on it, nor when it landed on the county auction block and sold to the highest bidder. She realized what was happening only when a man taped a note to the front door of her well-kept house in a leafy corner of Stockton, California, last January. “My son went out and took it down,” recalls the 43-year-old single mother of two, “and that’s when he told me it was a ‘three-day or quit’ notice.”

Walters’ discovery that her home had been sold out from under her marked the low point of a four-year fiasco that began when Ocwen Loan Servicing became her mortgage servicer in late 2004. Through no fault of her own, Ocwen incorrectly processed or lost dozens of Walters’ payments and charged her more than $2,000 in late fees and thousands more in additional charges—all without notifying her. The Florida-based company tried to foreclose on her three times. After she paid more than $10,000, Walters figured things were settled. But Ocwen had other ideas.

Sitting in the storefront office where she runs a tax preparation business next door to the local congressman’s office, Walters recounts her ordeal. She riffles through stacks of account statements and correspondence with the state and federal regulators she’s complained to. She has managed to stay in her home for now, but with little help from those agencies. “No one will deal with these people,” she laments. “Why isn’t anyone doing anything?”

Mortgage servicers are the housing industry’s middlemen, low-profile companies that handle the day-to-day business of collecting payments, managing paperwork, and initiating foreclosures. Some banks, such as Wells Fargo and Bank of America, have their own mortgage-servicing arms; others contract with companies like Ocwen. Either way, borrowers are largely at their mercy: They have no say in who services their mortgages, and they can’t fire their servicer for doing a bad job. “They’re set up to be dictators,” says Irwin Trauss, a housing attorney at Philadelphia Legal Assistance. “They’re set up to say, ‘It’s my way or the highway.’”

The housing bust may have revealed the shady side of the home loan industry, but unscrupulous mortgage servicers still have little incentive to change. Last year, the Department of Housing and Urban Development (HUD) received nearly 2,500 complaints about servicers, a 379 percent increase over 2007. In the first 10 months of 2009, consumers filed about 1,000 legal complaints against 10 of the largest servicers for illegal foreclosures and other predatory practices. A Florida widow is suing her servicer for allegedly badgering her husband with as many as nine collection calls a day, causing a fatal heart attack.

A federal class-action suit against Ocwen asserts that it has hiked mortgage payments without fair notice, forced borrowers to buy unnecessary insurance, and intentionally processed payments late. Ocwen’s general counsel, Paul Koches, says the lawsuit is baseless. He wouldn’t comment on Walters’ case, but said the company complies with and “takes all federal, state, and local laws seriously.”

The Obama administration’s Home Affordable Modification Program (HAMP) has set aside $75 billion to pay servicers to rewrite mortgages so homeowners can stay in their homes. (See “We’re Paying WHOM to Fix Subprime Mortgages?”) Beyond that, though, servicers have little incentive to help borrowers, because they can reap lucrative fees from arrears and foreclosures. “Fees have exploded since the meltdown,” says Trauss. Testifying before the Senate banking committee last July, Diane Thompson, an attorney with the National Consumer Law Center, explained that servicers have an incentive to “push” homeowners into late payments: “If the loan pays late, the servicer is more likely to profit than if the loan is brought and maintained current.” After Ocwen auctioned off Deanna Walters’ house, it collected more than $3,500 from 36 different buyers’ fees, in a single day.

Oversight of this troubled industry is spotty. “This is a very underregulated part of the system,” says Jack Guttentag, an industry expert and professor emeritus of finance at the Wharton School. “It shouldn’t be, because it’s the part where the consumer has no place to protect themselves.” Federal law allows servicers to send borrowers only one account statement a year—even if there are scheduled interest rate increases or new fees added during that time. If a borrower has a problem, HUD encourages her to first file a complaint with the servicer, and if there’s no resolution after nearly three months, she can then appeal to the agency—assuming she hasn’t been evicted in the meantime. While HUD can step in to fix the problem, it lacks the power to impose tough sanctions on servicers.

The Federal Trade Commission (FTC), Office of the Comptroller of the Currency, and Office of Thrift Supervision also have limited oversight over the mortgage industry. An OTS spokesman could name only one formal action the agency has taken against a servicer—Ocwen, in 2004. An OCC spokesman said his agency has never taken action against servicers.

The FTC has settled three major cases since 2003, resulting in settlements totaling almost $70 million. But even that hasn’t kept servicers in check. EMC Mortgage, a JP Morgan Chase subsidiary, settled with the FTC in 2008 for misleading and ripping off borrowers. That settlement, however, didn’t help consumers like Tammy Cothran, who says EMC foreclosed on her house outside Pensacola, Florida, even though she wasn’t in default. She has appealed to state and federal agencies, and even faxed the White House daily for five weeks. Those efforts left her frustrated: HUD told her it couldn’t help because her mortgage isn’t insured by the Federal Housing Administration, and the FTC said it was “not in a position to intervene.”

Mortgage servicers who have signed up for HAMP funds are prohibited from charging modification fees or foreclosing on participants in the program. However, the toughest penalties for noncompliance are withholding incentive payments or ejection from the program. A Treasury spokeswoman says that officials have reviewed thousands of loan files looking for mistakes or fraud. Yet in October the bailout watchdog SIGTARP cited HAMP’s poor oversight, and consumer advocates say there is no clear way to report wrongdoing. “I have yet to identify anyone to contact to say, ‘This isn’t working right. Do something about it,’” says Trauss. (For resources on dealing with servicers, click here.)

With nowhere else to turn, homeowners can always sue. Deanna Walters has sued Ocwen, and a judge has allowed her to stay in her home, even as the winner of the foreclosure auction is trying to charge her rent. Many who need legal help are those who can least afford it—like Cothran, who lost her job in May. A self-described “spitfire,” she is left to do her own legwork—”every day, all day long”—to save her home. “If you could tell me who I need to speak to,” she says, “I would be in a van tonight headed to Washington to figure this out.”

Credit Mother Jones

LIT Spotlight

It’s amazing the number of websites and pages that go “offline” rapidly after LIT shines the spotlight onto them.

About EMC, a JP Morgan Chase Co.

EMC Mortgage is a registered trade service mark of JPMorgan Chase & Co.. JPMorgan Chase Bank, N.A. services loans under the EMC Mortgage name.

EMC Mortgage is a mortgage banking company that specializes in the servicing of residential mortgage loans. With a staff of more than 1,600 employees, the company is headquartered in Lewisville, Texas within the Dallas-Fort Worth metroplex, with additional offices in Irvine, California. The company’s proven success is built on a foundation of providing competitive pricing and excellent portfolio management.

EMC Mortgage’s track record in providing quality customer service to borrowers and excellent portfolio servicing to investors is largely attributable to the expertise of management and staff. They are among the most experienced in the industry. EMC Mortgage’s management team has in-depth knowledge of customer service, collections, loan workouts, foreclosure administration, and accounting.

While keeping the customer in mind at all times, EMC Mortgage executes the firm’s value maximization philosophy and company strategy of thinking creatively. Regardless of investor, EMC Mortgage strives to conduct each servicing function as if it were being administered to their own asset. Employee training is a top priority with emphasis on regulatory compliance and collections. The company continuously examines methodologies, thinks creatively, and exercises financial prudence in every step of the servicing process. All employees receive extensive training to ensure proficiency in the latest technology and industry practices. Additionally, EMC Mortgage promotes advancement from within through team building and management training, which allows the company to retain the best employees in a highly competitive labor market.

Other noteworthy points:

• We are a member of the MBA
• Service over 480,000 loans
• Utilize each of the following rating agencies and have received favorable ratings –
  • Fitch
    

    	Residential Primary Servicer / Alt-A	RPS1
    	Residential Primary Servicer / Subprime	RPS1
    	Primary Specialty Servicer / Second Liens	RPS2+
    	Primary Specialty Servicer / Option ARMS	RPS2+
    	Residential Special Servicer	RSS1
    	Master Servicer	RMS3+

  • Moody’s
    

    	Primary Servicer / Subprime	SQ1-
    	Special Servicer	SQ2+
    	Primary Servicer/Prime Alt A	SQ2
    	Primary Servicer/2nd Liens	SQ2
    	Master Servicer	SQ3

  • Standard and Poor’s
    

    	Residential Servicer	Above Average
    	Residential Special Servicer	Above Average
    	Residential Subprime Servicer	Above Average
    	Master Servicer	Average

EMC LOAN PROGRAMS

Welcome to EMC’s Seller Page! Prospective sellers will find information here on our loan programs: EMC Loan Purchase Program, Conduit Loan Purchase Program and our Warehouse Program through EMC Residential Mortgage Corporation (EMC Res).

Since its inception in 1990, EMC has purchased over $50 billion in residential whole loans. This includes the purchase of Scratch & Dent, sub-performing and non-performing loans through the EMC Trade Desk and the purchase of newly originated non-agency loans through the EMC Production Conduit.

EMC Loan Purchase Program – Scratch & Dent/Non-performing Mortgages

EMC is one of the largest purchasers in the country of Scratch & Dent and non-performing residential mortgages. These loans are purchased from various institutions and brokers on a bulk or flow basis by competitive bid or through a pre-negotiated agreement. Portfolios may include second liens, Real Estate Owned (REO) and on a limited basis, non-residential properties. EMC provides competitive and consistent pricing combined with high service levels for its customers.

All loans acquired by EMC are subject to due diligence prior to purchase. EMC has an experienced due diligence staff with underwriting, servicing and compliance expertise dedicated to this effort. Portfolios are reviewed for issues including, but not limited to, credit, documentation, litigation, default and servicing related concerns as well as a thorough compliance review with loan level testing. Broker Price Opinions (BPOs) are also obtained on a selective basis. EMC’s closing process is streamlined, efficient and focused on maintaining high levels of customer satisfaction.

For more information on selling a package of loans please contact either your Bear Stearns salesperson or the EMC Trade Desk in our New York office at 212-272-8886.

Conduit Loan Purchase Program – Newly Originated Mortgages

EMC also purchases newly originated mortgages loans through our Production Conduit. Products purchased include both fixed rate and ARM programs for Alt A, Jumbo (Prime) and Subprime mortgages as well as fixed rate Second Liens. Several different delivery options are available for selling loans on a Bulk or Flow basis.

For Seller eligibility criteria and more information on Conduit loan programs, click on Conduit Loan Programs.

If you are an approved Conduit Seller and need access to this website, please contact Conduit Operations at 1-800-695-7695 X 3782.

Become An Approved Seller

Each Seller must be approved prior to selling loans to EMC. The approval process is designed to ensure that each Seller has demonstrated the ability to originate high quality mortgage loans.

Please complete the Seller Application and Seller Questionnaire as thoroughly as possible. If you are not able to provide the information requested, please include a brief explanation to the reason, and the date this information will be available. To E-mail the application or questionnaire form to the Seller Approval Department, first save the completed forms to your computer. Click the Seller Approval Link below, attach the forms and send.

To request a Seller Application be mailed or if you have any questions concerning the Seller Application contact our Seller Approval Department via email at sellerapproval@bear.com , or by phone 800-695-7695 X3782.

Eligibility Criteria

Net Worth: The Seller must have a minimum tangible net worth of at least $1,000,000. Net worth must be determined in accordance with generally accepted accounting principles.

Fidelity Bond and Errors and Omissions Coverage: The Seller must maintain at all times and at its own expense coverage as required by Fannie Mae.

Seller Experience: The Sellers current business must have been established for at least two years and have experienced the origination of conventional, 1-4 family mortgage loans.

Investor References: Seller must be in good standing with investor/agencies.

State License: Seller must be in good standing in the state(s) approved to do business and must be licensed to do loan originations.

Quality Control: Seller must exhibit a quality control program that conforms to the requirements of Fannie Mae. Seller must exhibit a pre-funding quality control process for Third Party Originations, if applicable.

SMMEA: The Company is either, and each Mortgage Loan was originated by, a savings and loan association, savings bank, commercial bank, credit union, insurance company or similar institution which is supervised and examined by a federal or State authority, or by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Section 203 and 211 of the National Housing Act.

Other Business Partners

Properties For Sale

EMC Mortgage Corporation (EMC) will, on occasion, have assets available for sale to the general public. Most of the assets available are sold in an “as-is” condition. Many have had some repair work performed. Every property in EMC inventory is listed with a local real estate agent. Should you desire more information on a particular asset, please contact the listing agent. EMC provides a detailed listing of all assets for sale to registered users of this website. To view our most current property listing, please click here to register.

Real Estate Brokers

During the processes of loan servicing and REO disposition, EMC has the need to obtain Broker Price Opinions (BPO) and to list properties nationwide with locally licensed real estate brokers. We are frequently looking for qualified brokers that can provide an excellent level of service within our established timelines and quality standards. If you would like to be considered for a position as an approved real estate broker for EMC, mail your resume and a copy of your real estate license to:

EMC Mortgage Corporation
REO Broker Database
P.O. Box 141358
Irving, TX 75014

Contractors

During the process of REO management and disposition, EMC sometimes makes repairs to properties prior to marketing for sale. EMC is frequently looking for licensed and insured contractors to join our approved contractor database. If you would like to be considered for a position as an approved contractor, email your resume or company information to our contractor manager Kurtis Sharp at: kusharp@bear.com

Please note that even though the name of any contractor, employee or agent thereof may appear in the EMC approved contractor database or on the approved contractor list, EMC neither guarantees nor assumes any responsibility for the performance of any such contractor or any employee or agent thereof.

Our Mission

We are committed to providing outstanding mortgage services, and we will do it better than anyone else!

As a responsible mortgage banker and servicer, EMC Mortgage Corporation fully complies with all laws and regulations applicable to our business operations, including but not limited to the Fair Debt Collection Practices Act, the Fair Housing Act of 1968, the Truth in Lending Act, the Real Estate Settlement Procedures Act, the Fair Credit Reporting Act, and the Equal Credit Opportunity Act. EMC is committed to providing high quality and ethical service to all our Customers. EMC does not tolerate abusive, misleading, or fraudulent servicing practices. Moreover, EMC strives to treat all Customers equally, and accordingly, does not discriminate on the basis of race, color, national origin, religion, gender, familial status, age or disability.

EMC is pleased to present our “Best Servicing Practices”, which reflect the company’s mission to provide outstanding mortgage services.

Best Servicing Practices

The Right Start

In order to assure a smooth transition of our Customer’s accounts to EMC, we review all loan terms to ensure we have the appropriate information loaded into our system. We send a Welcome Package to our Customers that contains helpful information, including payment information and coupons. We also place welcome calls to all new Customers to confirm that all payments made to prior servicers have been timely credited and that any outstanding issues are resolved and questions answered.

Customer Service, Satisfaction & Convenience

• EMC is committed to the highest levels of Customer service, satisfaction and convenience. We provide a comprehensive, automated information system to our Customers. ?Customer Care Net,? a web tool found at www.emcmortgageservicing.com, provides Customers access to their loan information 24 hours a day, 7 days a week. Customers are also able to obtain information through our easy-to-use interactive voice response system, which supports both our English and Spanish-speaking Customers.
• EMC’s “One Call Resolution” policy is to take care of our Customers’ needs during their first phone call to EMC. Our Call Center Agents are trained to resolve all Customer issues promptly and aim to do so without transferring Customers to other departments.
• EMC maintains a dedicated Customer Relations Department to address Customer inquiries and employs staff fluent in Spanish to assist our Spanish-speaking Customers.
• Customer service personnel are evaluated on their ability to resolve Customer complaints to the Customer’s satisfaction. Employees with the highest satisfaction ratings are recognized and rewarded.
• To ensure that our Customers receive the attention they desire and deserve, a Customer Advocate is available to listen to unresolved Customer complaints and present recommendations for resolution to senior management. Customers may contact Customer Service for assistance at 800-723-3004, and for additional assistance, the Customer Advocate may be reached directly at 800-695-7695 (ext. 7377) or via email at EMCCustomerAdvocate@Bear.com.

Payment Processing/Billing Statements

• EMC’s policy is to post all payments on the first business day payments are received and identified. In circumstances where payments cannot be immediately identified and posted (where, for example, a loan number is not included with a payment), EMC’s records will reflect a loan posting as of the date the payment was received once identification is made.
• Billing statements are sent to Customers on a monthly basis. Statements provide itemized information as to amounts owed, including fees and servicing advances, and detailed information regarding all aspects of a Customer’s account. Monthly billing statements are also available online through a secure website at www.emcmortgageservicing.com.
• For option arm products, EMC’s monthly statements include information explaining how the Customer’s various payment options will affect the loan balance and future amounts owed so that Customers are able to make informed decisions about their payment options.

Lender Placed Insurance

• EMC monitors Customer accounts to ensure adequate hazard and/or flood insurance coverage is maintained at all times.
• Once EMC is notified that there is no insurance coverage, we will send the Customer a series of letters over a period of 60 days and make phone calls requesting proof of insurance. In these letters, we encourage our Customers to purchase their own insurance to obtain the most favorable pricing and coverage.
• Although documentation of insurance coverage is required, if at any time a Customer verbally represents that he or she has insurance coverage in effect, EMC will attempt to obtain written documentation of insurance on the Customer’s behalf by contacting the Customer’s insurance agent.
• If it becomes necessary for EMC to obtain a lender placed policy for the Customer, EMC has competitive lender placed insurance rates.
• Even after a lender’s policy is placed, we encourage Customers to obtain their own policy. We will provide premium reimbursement to Customers who subsequently provide proof of coverage, only charging a premium for any days not covered by the Customer’s policy.

Home Retention Strategies

• We want Customers to be able to keep their homes. In most cases, foreclosure results in a loss not only to our Customers but to EMC and its Investors.
• Upon delinquency, home retention specialists evaluate loans before the foreclosure process begins to ensure that a variety of home retention options have been explored. EMC strives to find the best solution for our Customers, based on their willingness and ability to work with us.
• Included in EMC’s many home retention options, a refinance may be possible through our affiliate Bear Stearns Residential Mortgage Corporation. For assistance, please go to http://www.beardirect.net or call 866-658-BEAR (2327).
• Even after referral to foreclosure, home retention representatives actively solicit workout arrangements to stop the foreclosure process.
• EMC’s home retention strategies do not require Customers to waive any claims or defenses they may have.
• We do not assess late charges if the Customer makes timely payments under a repayment plan even though the loan remains delinquent during this time.
• We do not charge modification fees.
• EMC encourages customers to seek professional credit counseling where necessary and appropriate. EMC has established a relationship with Consumer Credit Counseling Services, an independent, non-profit counseling service, and will pay the credit counseling fee for Customers who seek their assistance. The national toll-free number for referrals is 1-800-388-2227 or www.nfcc.org. Other resources or assistance may be available through HUD (202-708-1112) or www.hud.gov. EMC also supports counseling and ongoing assistance programs offered by NeighborWorks America. NeighborWorks may be contacted at 1-888-995-HOPE or www.995HOPE.org.

In an initiative that was begun April 2, 2007, EMC created the ?EMC Mod Squad?, a loan modification team dedicated to helping delinquent Customers avoid foreclosure of their homes. The Mod Squad works with EMC Customers to identify various alternatives to foreclosure when the Customer is having difficulty making their mortgage payments. The Mod Squad is also partnering with local community groups from across the country to assist EMC Customers located in those communities. The EMC Mod Squad has targeted cities with higher at-risk EMC Customers, conducting educational workshops and presenting financial restructuring possibilities for these Customers. EMC has a toll-free telephone hotline for customers to reach the EMC Mod Squad at 877-EMC-MOD1 (877-362-6631), staffed Monday-Thursday 7 am to 9 pm CST, Friday 7 am to 7 pm CST, and Saturdays 7 am-12 pm CST.

Collections

EMC has a variety of tools to assist Customers who experience financial hardship. Our goal is to keep our Customers in their homes by exploring all avenues to help them through difficult financial times. Effective and early communication is an integral component of working through delinquency. Our courteous and understanding staff treats Customers with respect and dignity. We encourage our Customers who are experiencing financial difficulty to call our loan counselor team at 1-800-723-3004.

Pre-foreclosure Screening

All loans are pre-screened prior to initiating foreclosure to ensure that foreclosure is appropriate.
A committee of senior executives conducts an additional review of any loan that fails to meet the screening criteria so that no loan is referred to foreclosure unless foreclosure is the only appropriate course of action. We continuously look for ways to help Customers keep their homes while at the same time satisfying the debt that they owe.

Protecting Privacy of Customer’s Data

EMC Mortgage has a long standing policy of protecting the confidentiality and security of our Customers’ confidential information. Federal and state law and regulations require EMC to implement policies to protect personal information of Customers and provide Customers with a written notice of our Privacy Policy. Safeguarding Customer data is very important to EMC. We have robust privacy and security procedures and controls for our employees, contractors and vendors, all of whom are audited from time to time to ensure compliance with the law and our policies. These policies not only govern electronic data but also cover physical access to our facilities, personal background checks prior to employment, and the shredding and destruction of paper documents. In addition, all personally identifiable Customer data that leaves our secure environment is encrypted. EMC’s strong safeguards protect our Customers from identity theft. For assistance with identity theft, call 877-Fraud-44 (877-372-8344).

Fair Fees

Servicing fees are monitored to ensure they are fair, reasonable and compliant with state and federal laws.
EMC’s fees are competitive within the industry, and many services are provided free of charge, including:

• Opening an escrow account
• ACH monthly payments
• Automated speed payments
• Copies of appraisals and other loan documents
• Amortization schedules
• Payment histories
• Verifications of mortgage
• Duplicate IRS year-end forms (1098;1099)
• Modifications

Credit Reporting

EMC reports Customers’ payment history to major credit reporting agencies on a monthly basis, which assists our Customers in building and maintaining a strong credit history if payments are timely made. In the event there is a complaint or dispute about our credit reporting, we immediately report the dispute to the credit reporting agencies and take prompt action to resolve the dispute.

Quality Assurance

EMC has comprehensive quality control measures at several different levels, including internal self-auditing programs, a well-staffed Quality Assurance Department that monitors adherence to internal service standards, policies and procedures, and applicable laws and regulations, and a full-time Internal Audit Department.

Employee Training

All employees receive training on applicable laws as well as EMC’s policies, procedures, and service standards. Audits are conducted to ensure employees’ compliance. EMC also conducts call monitoring to ensure employees are meeting Customers’ needs and acting in accordance with company policy as well as all applicable laws and regulations. Insofar as an audit reveals concerns about an employee’s compliance with policies, procedures, or expectations regarding service levels, EMC acts swiftly to address those issues.

Customer Surveys

EMC retains an independent polling company to conduct frequent surveys of randomly selected Customers to ensure Customer satisfaction. While we believe that the majority of our Customers are pleased with the level of service that EMC provides, if any Customer indicates dissatisfaction, we take steps to not only resolve that Customer’s concern but to remedy any processes that may cause additional Customer concerns in the future.

Is your home mortgage with EMC? Click here.
www.emcmortgageservicing.com

To Contact Us In Writing:
EMC Mortgage Corporation
P.O. Box 141358
Irving, TX 75014-1358

For Customer Service Inquiries: (800) 723-3004

For Non-Mortgage Related Inquires: (800) 695-7695

To Pay Your Mortgage Payment:
EMC Mortgage Corporation
P.O. Box 660530
Dallas, TX 75266-0530

Corporate Headquarters:
EMC Mortgage Corporation
2780 Lake Vista Drive
Lewisville, TX 75067-3884

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