Homeowners have struggled to stay in their homes or find a financially feasible way to avoid ruining their credit during the recession. Many homeowners in Florida and elsewhere have pursued loan modification options as a means of keeping the home. However, one Florida company is currently under fire for what are being called dubious practices when it comes to helping out homeowners.
The company has been ordered to pay a massive settlement because of its actions. It has been ordered to pay $2 billion through the reduction of principal amounts on home loans. The company has also been ordered to $125 million to homeowners whose homes were foreclosed on.
It was found in violation of finance laws for a number of activities that were carried out in Florida. They were found to not be applying payments correctly, including applying the payments late to the detriment of the homeowner. The company also was found to be applying fees that were not authorized. There were also practices in place where homeowners were falsely told they were not eligible for loan modifications.
While restitution will be made as the company pays the amounts ordered, the damage to homeowners may have long-lasting effects. The loan modification process and foreclosure process both can be complicated and time-consuming. Homeowners that are not certain of their rights or the consequences may find themselves in unchartered territory without fully understanding their status. Any homeowner struggling with payments or seeking to learn more about loan modification may benefit from knowing the process and also what other options may be available.
Source: marcoislandflorida.com, $2.1 billion settlement with loan servicer, No author, Dec. 19, 2013