Complaint Review: HomeQ Servicing

Although I do not agree with every policy/procedure that was done at HomEq, these are just the facts.

"Payments are due on 1st of each month... if not received by 2nd or 3rd they will call you two - three times A DAY!"

Granted, you do have 14 days after until you get a late charge fee, your contract still says that your payments are due on the 1st of every month. HomEq is required by the lender who setup your loan to receive payments on the 1st of every month. If you receive calls that early, it's because your payment history or credit report from other mortgages, credit cards, home equity loans, or previous servicer is bad/low or you barely qualified for the loan, whether or not your loan officer told you that. If you wish for the calls to stop, you can do any of the following several things:

1) Post a payment for the end of the month online. Cancel by the 29th if you don't have the funds. Still be prepared to answer why you must do so, even if it's every month. It's a HomEq policy to ask that on every single call.

2) Setup a Check By Phone for the end of the month. Cancel by the 29th if you don't have the funds. Still be prepared to answer why you must do so, even if it's every month. It's a HomEq policy to ask that on every single call.

MOST SUGGESTED - 3) Set yourself up on your own repayment plan to catch up for the month you're having trouble making a payment for if your finances allow it. Don't setup on a repayment plan through the company unless you owe for 2 months b/c it WILL affect your credit. Being self-employed, you'll want to do this for yourself and get ahead so that when things get tight, you'll have a lot more time to make your payment.

For example: You owe for the month of January but can't pay until January 31st or some time into early February. Your payment is $1500 per month. Pay HomEq your payment of $1500 per month and put $300-$500 in a savings account for 3-5 months each time you make a payment. At the end of 3-5 months, make your regular monthly payment of $1500 and send in/set up a payment from the money you have put aside in your savings account. Let's just say that it is now June 30th when you do this. You will be making your June and July mortgage payment and will not have another payment due until August.

4) Lastly, answer the phone, ID yourself as the borrower or spouse, and hang up if you choose to do so, though not recommended. You'll get a call about 3-4 days later if you're due for the current month. If you're due for two or more months, you'll get a call the next day.

"If you are 30 days late they will send a letter and add $75.00 process fee to your account, stating you are in default and that you have additional 30 days before they begin foreclosure."

Beginning foreclosure and foreclosure work-flow are two separate things. When you are 2 months past due, HomEq is no longer sure whether or not you are able to make your payment and without contact from you, it seems you are trying to get out of the home without resolution. All of the following can still occur even if you do set up arrangements and stay in contact with HomEq b/c if the arrangements cannot be kept, it could comprise the property value. And yes, when a customer has worked out a plan and is still charged fees, it's all about making money. If you were to invest several to hundreds of thousands of dollars in anything, you would also want to make sure that your interest in the investment was safe and would take any steps necessary to do so.

The $75.00 process fee could have been from a Broker Price Opinion, Breach Letter, Property Inspection, legal fee, or combination of any of those that HomEq was charged for by the owner of the loan, seeing as how HomEq is just a servicer. The lender considers the property to be in a state of danger when a customer owes for 2 or more months so they require steps to be taken and fees charged to HomEq to protect the security of the property. This is foreclosure work-flow. Foreclosure, in its true definition, doesn't actually being until 3 or more months past due. Here are two things that I dealt with while working there, the latter more often (9 out of 10 instances):

1) Customer was past due for 2 months, removed the doors and windows from the home, stripped all of the copper piping and anything else valuable, and left the home, never again making a payment.

2) Customer would setup on repayment plan after repayment plan and never kept the plan. It was only done to stay in the house for a little bit longer but this person never had plans to make these payments.


"i ask her several times if i could make payment - her response was always in a minute, you must make arrangements now to make your other payment and again said they had sent letter that my house was in foreclosure state.... i finally told her that since she would not take payment.... i would mail it and hung up"

It sounds like that she was trying to document your call, ask the required questions to make the call "successful", and you assumed that she was refusing to set up a payment with you. Going back to policy here, as a rep, you are required to set up some type of arrangement with the customer for his or her next payment or at least get an idea on when they'll make it even if they make their payment on time, much less if it's 30 days past due.

The rep knew that you would keep getting all sorts of fees, collection calls, and Breach Letters (which are not saying that your house is in foreclosure. read the entire letter before commenting or calling) and would like to try to prevent that from happening by setting up an arrangement, giving you other scenarios, and a realistic outlook on your payments. Most likely, if you have absolutely no idea when your next payment will be made b/c you don't know when/where the money will be coming (if it does at all), you have 1) gotten into a mortgage that you can't afford, 2) not prepared yourself financially to have a mortgage, or 3) fallen upon extremely hard times.

Here's something realistic to think about.

Example of the MAXIMUM amount of your income that should be spent towards your mortgage:

The 28/36 ratios
Lenders compare your monthly income and expenses to certain qualifying measures, called the debt-to-income ratio. Most lenders will finance buyers whose monthly house payment (including loan payment, property taxes, and insurance) will not exceed 28 percent of their GROSS monthly income. But lenders also pay close attention to another measure known as overall debt ratio. This is your total monthly expense including housing, credit card minimum payments, loans, and all other debts.

Usually lenders expect this total ratio to fall below 36 per cent of gross monthly income. When you draw up the balance sheet of income to expenses hopefully you'll have an overall debt ratio that won't scare off a lender.
(Taken from www.salary.com > Personal > Personal Finances > Income and Mortgage Size)

Meaning, if you make $4,000/month, your mortgage payment(s), insurance, and property taxes combined should NEVER exceed (and this includes the maximum amount that an ARM loan COULD AND MOST LIKELY WILL change to) - $1120. This percentage is used in most prime mortgage loans.

As for how HomEq makes its profit:

HomEq is funded by lenders. The lenders pay HomEq for not having to process payments, collection calls, service transfers, etc. Legal expenses and "processing" (i.e. corporate advance fees) go directly to the company who charges the lender for it. How to prove it? You'll find out quickly that HomEq has no idea who did the services.......but your lenders will know.

From my knowledge and point of view:

The average cost, with no profit in return, of a foreclosure is $78,000. (http://themortgageguru.wordpress.com/2007/04/21/what-is-the-avergage-cost-of-foreclosure/). $50,000 of this comes directly from the pocket of the lenders, which is some justice if you ask me, considering how horrible that a lot of mortgage brokers and loan officers set up people on loans they knew that they couldn't afford.

That's why you receive calls on the 2nd or 3rd of the month. The last thing a servicing company wants to do is foreclose on a home b/c they have to do all of the work while the lender sits back and watches it all happen, while charging the servicing company to do so claiming "the servicing company couldn't take care of it". It puts the customer in a horrible situation and costs a ton to do so. It doesn't make sense to want to foreclose on you when it costs them tens of thousands of dollars.

However, the rep that you spoke with may have made you feel that way b/c they are uninformed and under-trained. Most people can imagine how unique and significant everyone's situation is in purchasing, paying, or falling behind on a home.

Now, combine that with the 2 days of training that is given and then put on the phones (while under more scrutinized supervision for one month but on their own after that), having 8/10 people you speak with curse you and hang up the phone simply after identifying yourself, and then try to simply follow a required policy (that can and will affect your pay if done improperly) to still be hung up on after attempting to produce results. Most reps simply do not have the patience to deal with another person who is upset with them for a mortgage that they cannot afford and demanding to be helped. Tone and attitude goes a long way when speaking to a rep, just like when you are spoken to, if the call is to be more pleasant.

True: A rep has the potential to earn a bonus for getting a high amount of Check By Phone's (CBP) or any other promised arrangement for a payment as long as ALL guidelines are followed. This means that it doesn't matter if the rep sets you up for a CBP or if you go online and do it for free. They just want you to pay your mortgage.

False: A rep gets a bonus for every single Check By Phone he or she sets up. I honestly wish that were true. If you had me on the phone and told me that you were going online that day to setup an internet payment, I would have had absolutely no problem with that.

But, the reason why you get questions like "Why were you past due?" and "If you're able to make your payment today or tomorrow, what's changed to now allow you to do that since the last several have been late?" is because a majority of the reps are lied to by the customers. Unfortunately, in terms of INTENTIONALLY lying to people, customers are, by far, doing a majority of it. Someone who tells you "Yes, we can work this out with a repayment plan" and then another rep telling you "No, you have to do a short sale" one day later is not lying. It means that the first rep you spoke with was uninformed and under-trained, just like 80% of the customers were uninformed when they got the loan.

I know this is an extremely long post but I felt it necessary for people to understand that a servicing corporation that has been given some of the highest benchmarks for collections for sub-prime mortgages would be unable to stay in business if they just wanted to foreclose on everyone and didn't process their customers payments. It would be too costly for them even if they did want to foreclose. When it comes to mistakes and being told the wrong things, I suggest after making arrangements with a representative, do 1 of 2 things:

1) Ask to speak with a supervisor to confirm what just happened OR
2) Call back the next day and speak with another rep just to make sure everything is is correct.

I know that many of you have probably done this several times and were the unfortunate victim of back-to-back and sometimes -to-back reps and/or supervisors who had no idea what they were talking about. Lobby the owners to do more about the training there instead of posting that "this is such a horrible company" and "all of your reps are idiots." If I had a number of bad experiences with your own company and I told every single person that I knew that you were an idiot and your company is out to get them, you wouldn't have a problem with that, right? Of course you would. You would want to resolve the problem because you are the owner. The owner is as in the dark about any type of horrible mistakes happening than any one else.

I still think that there are SEVERAL policies that need to be changed immediately that can and will affect a customers outcome and attitude towards the company. Reps and supervisors are now required to give you the information directly to the president so keep on emailing him! He has to get back to you at some point in the very near future. Hope this has helped someone out and I'm always free to answer any questions.

I think you need to really read the actual complaint in order to try and comment. John stated nothing but fact based on the complaint. You based you blind bashfest on, well, nothing. The OP has no complaint as they admittedly are OVER A MONTH LATE. Granted this is what this company may have been waiting for but, the OP started this process themself.

Hey John, Why don't you go fly a kite you Rude SOB. The person filing the complaint was obviously unhappy with the service your company provides. The lacking service is also obvious in your rude rebuttal. I will make it a point to not ever due business with your company ever. You can say whatever you want, I still think your a piece of garbage. You could have had a more constructive comment or said that you were sorry. You hear what I am saying child.

#1. on the 2nd and 3rd of the month YOU ARE LATE ON YOUR MORTGAGE. DOES THAT REGISTER TO YOU, YOU ARE LATE.

#2. FDCPA (Fair Debt Collection Procedures Act) is legslation strictly followed with the debt collection performed, dont get mad, you are late, tell them why?

#3. If you say I am self employeed, be prepared to answer a question or two. Is it really that hard? YOU ARE LATE ON YOUR MORTGAGE. If you were renting you would be given a notice of default after 5 days. Say thank you, for being so patient with your payment history.

Look, collectors are there to remind you that you made a decision to comply to a mortgage, and its not a flexible contract. Maybe you should sell your house get into a reasonable rental and explain the the landlord that the economy is bad. They should be more apt to not questioning your story. Good luck with the economy and your self employeed business. I wish you luck because your lack of planing and financial savy are making you look at the decision you so ignorantly signed up for.

#1. on the 2nd and 3rd of the month YOU ARE LATE ON YOUR MORTGAGE. DOES THAT REGISTER TO YOU, YOU ARE LATE.

#2. FDCPA (Fair Debt Collection Procedures Act) is legslation strictly followed with the debt collection performed, dont get mad, you are late, tell them why?

#3. If you say I am self employeed, be prepared to answer a question or two. Is it really that hard? YOU ARE LATE ON YOUR MORTGAGE. If you were renting you would be given a notice of default after 5 days. Say thank you, for being so patient with your payment history.

Look, collectors are there to remind you that you made a decision to comply to a mortgage, and its not a flexible contract. Maybe you should sell your house get into a reasonable rental and explain the the landlord that the economy is bad. They should be more apt to not questioning your story. Good luck with the economy and your self employeed business. I wish you luck because your lack of planing and financial savy are making you look at the decision you so ignorantly signed up for.

#1. on the 2nd and 3rd of the month YOU ARE LATE ON YOUR MORTGAGE. DOES THAT REGISTER TO YOU, YOU ARE LATE.

#2. FDCPA (Fair Debt Collection Procedures Act) is legslation strictly followed with the debt collection performed, dont get mad, you are late, tell them why?

#3. If you say I am self employeed, be prepared to answer a question or two. Is it really that hard? YOU ARE LATE ON YOUR MORTGAGE. If you were renting you would be given a notice of default after 5 days. Say thank you, for being so patient with your payment history.

Look, collectors are there to remind you that you made a decision to comply to a mortgage, and its not a flexible contract. Maybe you should sell your house get into a reasonable rental and explain the the landlord that the economy is bad. They should be more apt to not questioning your story. Good luck with the economy and your self employeed business. I wish you luck because your lack of planing and financial savy are making you look at the decision you so ignorantly signed up for.

#1. on the 2nd and 3rd of the month YOU ARE LATE ON YOUR MORTGAGE. DOES THAT REGISTER TO YOU, YOU ARE LATE.

#2. FDCPA (Fair Debt Collection Procedures Act) is legslation strictly followed with the debt collection performed, dont get mad, you are late, tell them why?

#3. If you say I am self employeed, be prepared to answer a question or two. Is it really that hard? YOU ARE LATE ON YOUR MORTGAGE. If you were renting you would be given a notice of default after 5 days. Say thank you, for being so patient with your payment history.

Look, collectors are there to remind you that you made a decision to comply to a mortgage, and its not a flexible contract. Maybe you should sell your house get into a reasonable rental and explain the the landlord that the economy is bad. They should be more apt to not questioning your story. Good luck with the economy and your self employeed business. I wish you luck because your lack of planing and financial savy are making you look at the decision you so ignorantly signed up for.