Complaint Review: money store - homeq servicing mtge - Sacramento California

You have both presented me with some very difficult questions and some good information. I can honestly say that you, Robin, have taught me something with your information quoted from The American Banker. Those type of decisions, if that be the case and the process that is used, are made well above my head and without my input. I could see that as being somewhat of a possibility, case in point (the situation of Cs)which follows your comments. In that his loan would seem to be one which qualified under Prime Lending and who's servicing was sold and transferred after a period of good paying history? One in which very little 'soft costs', such as late charges, check-by-phone, bank wire, and other misc. fees could be captured. I couldn't say for certain. The majority of the mortgage portfolio for which HomEq is responsible for servicing is subprime. However, a portion of the portfolio was once serviced by First Union and contains some 'A' (prime) paper. Which would appear that yours was Cs. They are not a lender though, only a servicer. It is common practice for servicers to remove money from escrow accounts to pay the taxes &/or insurance as it become due. It is uncommon, however, for the check to turn up missing and then not be replaced for over 3 months. I am certain that individuals employed by HomEq are not intentionally trying to deceive you or purposefully keep your $347 dollars. It is more likely a fact that with the transfer of service, someone is not really motivated to do the job and their research since the loan is no longer handled by their company. Some types of individuals due lack the motivation and desire to do the requirements of their jobs and the rest of us suffer for it. I will look for your response if you continue having problems with this issue and can provide you with some additional phone numbers or contact names if need be. It has never been my desire to defend HomEq, or any other servicer for that matter, from scrutiny. I just desired to clarify some misinformation and conceptions that were continually appearing in the complaints. I advocate scrutiny and along with that the acquisition of knowledge. I am continually learning and had it not been for Robin's desire to dig deeper and learn more, I would not have been made aware of the information that was provided. I will continue to review the information and reports on this website and see if I can perhaps 'lend a hand' where possible. This website is a brilliant forum to get information out to the public so that they can get involved, where need be, and potentially protect themselves or others from becoming victims.

We refinanced our mortgage in march of 2002 with a reputable mortgage company in our city. We have excellent credit with fico of about 820 for the both of us and I have been reading about homeq for a while because in April of 2002, our loan was sold to Homeq immediately. Now, is this company a subprime lender only? Why would they obtain our loan? I really didnt care for their harrassing phone calls about payments when they were not even due yet. Not only were they looking for current payment but the following months payment. Our payment history with Homeq was great never missed a payment, but soon found them to be rather harrassing. Our mortgage was again sold from Homeq to Citifinancial in December of 2002 and I was very pleased to find this out because I just didn't trust their business. Why did they keep our loan for only 7 months. Is it because they figured they werent going to make money with late fees and other bogus fees? sounds like maybe that could be the case? Homeq received our homeowners bill in November of 2002 for payment and they sent a check to the insurance company, but it was never received so citifinancial had to resend the amount overnight to make sure it wasnt late. Here it is March 2003 and we have been fighting to receive our 347.00 back from homeq/wachovia. Is this normal practice to remove money from escrow and send a mystery check that never is received and takes 3 1/2 months to credit back? I have been reading your responces and think your rather knowledgable about this company. Please respond because I am curious.

I appreciate your taking the time to write a response to all these questions. As you pointed out, my understanding of these business workings was, and is, limited. However, I have been doing my homework. I allow that anyone who willingly takes on a debt should pay. That said, considering that most mortgages have a lifespan of 20-30 years: a lot can happen in a timespan that long. People lose jobs, experience natural disasters, people develop illnesses; well, stuff happens. I do not feel that the majority of people take out loans with the intention of defaulting on them, especially when it is their home at stake. There is no real advantage for the consumer in trading a mortgage payment for a rent payment, which is what happens when one's home is foreclosed on. In the interest of no longer being a total fool in these matters, I did some research into the seemingly sudden proliferation of these "servicing companies" especially the ones that originate or are affiliated with banks, as in the case of HomeEq. The August 24, 2001 issue of THE AMERICAN BANKER seems to clarify the issue of why these companies are created. "Most banking companies that have subprime lending operations house them in nonbank subsidiaries, which shields them from examination by bank regulators.". (Direct quote) Uh oh. In other words, banks with national charters are under the direct oversight of the OCC. The nonbank subsidiaries are under very little, if any, Federal scrutiny. This puts the onus of trying to solve any problems squarely on the shoulder of the person trying to pay the mortgage. As a civil matter, the mortgage payer has to hire lawyers, go to court, and prove a case. This is costly and time consuming. Not everyone has the means to do this or the temperament to try, a fact that servicing companies seem to rely on. The drill seems to be this: the banks hold the loan while it is still in the interest drawing portion of its life; five to eight years perhaps. Then the loan is sold or moved to the servicing company where the opportunities for adding fees and/or perhaps raising the interest rate due to a couple of late payments are wide open. Thus, the financial institution greatly increases its opportunity to milk the cash cow for the entire life of the loan, rather than just during the first half of the note. By doing this it avoids interference from the Federal regulators, who would not allow this in the normal business of the banks' business. I looked at Wachovia's website. I could find no mention of HomeEq. I clicked link after link and if it is there, it is in really small print way deep in the site. HomeEq's website trumpeted it's affiliation with Wachovia right on the start page. But, if a person is applying for a loan with First Union or Wachovia they would not even know to look at HomeEq's site. Undoubtedly, any loan originating with First Union/Wachovia will eventually wind up with HomeEq, but it knowledge after the fact. Wachovia is not being totally up front with this information at all! This is a beautiful scam- FOR THE BANKS! There is no benefit for consumers in this business. It is simply a glorified bait-and-switch tactic which is, unfortunately, legal at this time. This needs to be changed ASAP. There is still the disturbing matter of the "errors" that seem to occur right before or during the transition to the servicing company. Seems as though payments get misplaced or incorrectly credited. That is part of business. Mistakes happen. The truly disturbing thing is the inability of the payer to get these errors corrected. It seems as though once these mistakes take place, they are irrevocable. Only an act of God or an act of Congress will get them fixed. An Act of Congress is exactly what is needed here. This is one of the biggest dupes ever pulled on the American public and it has gone on long enough. I realize that politicians get huge contributions from banks and servicing companies and even go golfing with them (did you know that Fannie Mae golfs with Fairbanks, Ocwen, HomeEq and all the others at least once a year at Hilton Head? Scary). Nevertheless, they will have a much bigger problem trying to find housing for all the folks displaced by this shameless scheme. I am in the process of writing a letter to my local Congressperson. If it has to go to a state level first, so be it. One small step at a time.

Samuel: Thanks for the response and I hear what you are saying, BUT!!!! There is a wide variety of complaints posted against HomEq Servicing---it is not all about past due accounts. Case in point: My original complaint with HomEq was due to the fact that they are claiming that I owed them a payment from May 30, 2000. Now bear in mind, that all payments have been made with secured funds and well documented! I was contacted by HomEq about this May 2001 late payment in November, 2002. Therefore, they were not concerned about it for (18) months---I don't think so! I spent the months of December and January trying to talk to "The Right Person", this only came about after I sent a letter to the VP of Operations! This alleged late payment has been (30) days late, running for (18) months along with late fees and interest on top of the late fees. SHOULD THEY HAVE NOT CONTACTED ME --LET'S SAY JUNE 01, 2001 CONCERNING THE MAY 2001 PAYMENT? But they can make extra money by not contacting me! I was recently contacted by HomEq after a (3) month battle. The focus now has shifted to my December 2002 payment (not showing that it was posted! I have since faxed them a copy of the bank check where it was paid by my bank to HomEq Servicing, now to what account---Who knows? As a nice jesture to me as a customer, HomEq has waived the accruing late fees totaling $1,800.00 from the (18) month span. WOW--that was nice of them! I have not yet heard from them concerning the newly claimed late payment from December 2002. I requested a (24) month payment history from them and they sent me a customer's payment and account history that lives close to 250 miles from where I live. Two weeks later the (3) major credit agencies contacted me about being denied credit that I have not applied for and told me that at this point all activity concerning my social security number will be frozen until investigated thoroughly. MAKES ME WONDER HOW MANY TIMES HOMEQ HAS MISTAKENLY SENT MY INFORMATION TO OTHER CUSTOMERS! I did contact them and the customer about his information being sent to me. HomEq stated that they will address it! END RESULT: We at HomEq will waive the late fees that accrued from May 2001 because it is not legitimate charges. But the fact remains that you as a customer are missing (1) payment being posted according to our (HomEq) records. As a consumer, you are responsible to make this payment, please contact Loss Mitigation to work out payment arrangements. MY OPINION: I sent them every receipt for (20) months of the time frame in question, NEVER LATE--hard to believe right? They have the proof, but according to HomEq records (for whatever reasons) one of those payments was never credited and by gosh if it's the last thing they do, "They are going to prove and find a hole somewhere, somehow to prove that I am responsible for that (1) payment in question". NOW IF THE LATE CHARGES WERE NOT LEGITIMATE, WHAT MAKES THE LATE PAYMENT ARGUMENT LEGITIMATE? If the payment was truly late, they would not waive the fees and they would not have waited (18) months to notify me, not as aggressive as they are! This one is for MICHAEL, whom apparently only attacks the people that have admitted being late. My original loan was with First Union and my original loan was $112,000 from June 1999. I am in the process of moving my mortgage to another lender and my pay-off is $115,000 with a payment of $1,285 per month. It does not add up! Can you figure that one for me? It must be due to the fact that I didn't make the May 2001 payment! What do you think?

Your response, and your questions are very good questions. Although I have a very good understanding of the mortgage servicing industry, you have asked some very tough questions that I am not sure I will be able to clearly answer for you. When I stated that the loans generated by TMS were 'poorly originated and serviced', I was making a comment based upon my personal opinion and, to some extent, my experience with a portion of that portfolio. I was not stating a fact that would pertain to all loans originated by TMS. However, in my personal opinion, there was at least a small portion of the mortgage portfolio which I felt were not good loans..for whatever reason. As well, it is my personal opinion that the servicing of some of those loans was not adequate..again for whatever reason. That, again, is my personal opinion and not to be construed as a business fact. Regarding at least some of the business decisions made by the original founders of TMS, there is little doubt that those decisions were not all good ones. This would be evidenced by, what is my understanding, that after the loans and business were sold, the original owners filed for bankruptcy protection. That, if my understanding is correct, would speak for itself. Yes, one of the principal reasons for selling loans on the market is to generate business capital. In the case of First Union's acquisition of TMS, that reason could be applied to the decision on behalf of TMS. They sold their portfolio, and actually the entire business, buildings, etc.., to generate capital and additional income. For First Union, it was a decision to acquire a company and portfolio of subprime loans. First Union, in turn, has used that purchase to generate income for their company. I am certain that a portion of those loans matured and paid off. Another portion more than likely refinanced and generated payoff income. Yet more of those properties were sold by the homeowners, generating loan payoff income. As well, First Union has packaged and sold a portion of that portfolio to other servicing agents. This action, again, generates income for the company. The creation of HomEq Servicing, was a way for First Union to become more active in the subprime servicing market. They bought an entire company and loan portfolio in the purchase of TMS. TMS was a very solid player in the subprime lending market and gave First Union a large share of that market immediately upon acquisition. The contact information that you refer to, ie. letters, contact numbers, payment addresses, etc.. were generated and mailed out to every customer in the form of mass mailings upon acquisition. The following is not to say that there are not legitimate complaints made by some of the individuals on this site concerning the servicing of their accounts, but many people who have failed to pay their accounts timely did not recieve their notices and letters because they were not accepting mail from their servicers. Meaning, some were in, what I term, the 'avoidance mode'. They knew that they were behind on their loans and had previously received collection calls and letters, and were no longer even bothering to open or accept mail from TMS. They more than likely refused the delivery, threw the mail away without ever opening it, or any number of other tactics employed by individuals who are avoiding debt collection. That statement is of course partly my opinion and partly based on my experience with these situations, not necessarily a fact that can be applied to everyone who did not receive the applicable letters. Finally, I partly responded to the question of the creation of HomEq Servicing above and will expand just briefly on that as well. First Union / Wachovia, like any large corporation, has many different companies and branches which fall under the corporate umbrella of their business. HomEq Servicing is just one company or branch that falls under the First Union / Wachovia umbrella. They also have business in investments and all areas of banking, under a couple of different title and names. These companies have different locations throughout the United States and the world, for that matter. That would lend to why the addresses, phone numbers, personal contacts, etc.. change with the servicing assignment even though the actual loan ownership is not effected. The following short response is to answer Lee's question: Currently HomEq Servicing handles only mortgage accounts and the FDCPA recital was not previously incorporated in their communications. The company is currently attempting to position itself to take on additional collection business in the future, not just a mortgage servicing / collection company but a full service collection company. This new collection business could be in the form of credit card, unsecured, charged off or other outstanding debt and would require FDCPA compliance. You see, and hear, that recital as part of the company's attempt to position itself for this transition. I hope that I have been able to answer, or clarify some of the questions that have arisen? I am not trying to defend this company or all of the business practices that are used in the industry. I just find it unfortunate that so many people go get a loan for a home, or whatever or need, and don't bother to read or understand what they are doing? In the past, when I have applied for loans of a substantial amount, it's my personal practice to ensure that I understand everything contained in the contract documentation. Whomever I borrow the money from is certainly expecting to get their investment back. I am willing to bet that not one single complaint that has been voiced about this company on this website came from an individual who has kept their loan current and never fallen more than 30 days delinquent. Of course, I can't prove that..but based on my experience in the industry, the people who pay their bill on time every month regardless of their circumstances, aren't complaining about the company. Those people understand that they have initiated a debt and repayment is expected, regardless excuse. It's that simple.

I would like to tap Samuels' knowledge also. My mortgage originated with First Union and was transfered to HomEq Servicing. If HomEq Servicing is handling the mortgage division of Wachovia and First Union then why when you call them or they call you, the first they that is stated is "HomEq Servicing is a debt collector and all information will be used for that purpose"? When I used to call First Union they did not present themselves as a debt collector! It makes me wonder if HomEq is one massive collection agency set up to hound all clients! Whether you pay on time or not! Is it possible that you may know the real story behind HomEq Servicing?

To Samuel: Obviously, you are endowed with a great understanding of what is going on here, so I will ask some more questions if you don't mind. And try to clarify what I was trying to say, as well. You, yourself, said in your first posting that the portfolio of loans acquired from The Money Store was "poorly originated and serviced" causing me to believe that there were bad business decisions made by this company (TMS). If this is a wrong idea, well, it came from your post. But it is moot now since The Money Store is evidently history, so we'll move on. TMS loan portfolios were SOLD to First Union National Bank/Corporation, who then BOUGHT Wachovia, and is now using that name (Wachovia). Nothing was sold to HomeEq as HomeEq is, and always has been, a part of First Union/ Wachovia. Am I with you so far? The purpose of selling portfolios is to free capital in order for the originating lender to be able to make more loans; generating capital, so to speak. That makes sense, except when viewed in the context of your reply. There was NO SALE of portfolios as HomeEq IS Wachovia/First Union, so there is no capital generated for Wachovia as far as I can see. A SALE would have made better sense in the context of your reply. So, the questions now are: Why was HomeEq created in the first place? What was the point? Since HomeEq is Wachovia and business decisions of this magnitude are rarely reached overnight, why was there not some preparation made for the customer (ie; letters informing them of new mailing addresses and contact info)? Why is there STILL so much confusion since the creation of HomeEq seemed to be in or around 2001? Why is it that folks cannot seem to gain on these loans? Your reply makes me feel as though Wachovia/First Union is trying to distance itself from this portfolio of loans by creating HomeEq? Why? Sorry, your reply just gave me the idea that there is something at play here that is not being made public. The mass confusion created by this "switch" (which, according to your reply, was never really a switch at all) is pretty good for packing on those late fees and interest rate increases. Actually, and this is only my opinion, your reply was as damning as anything I have read thus far on this site. You have clarified absolutely NOTHING concerning HomeEq as HomeEq is not a cash tool, or cash generator, or any of the other myriad excuses for these transactions that you gave. HomeEq seems to be a tool to create the impression that a loan has been sold when, in fact, it has not been. A tool for confusing the customer. Since there was no real movement of these loans, there is no excuse for the "errors" that are taking place. I assume that HomeEq has access to Wachovia's database, so why all the "OOPSIES"? I am afraid that the questions will just keep coming. It just looks like a predatory ploy, now more than ever! If this is wrong, please let me know why it is wrong ; I can keep an open mind. So far, it is just getting deeper and the smell is getting stronger!

Yes, it is Samuel and not Sanuel as shown incorrectly on the previous comment. The pooling and selling of servicing rights to specific types of loans has nothing to do with the origination of the loan. (i.e. comment concerning making bad loans and then selling them off to others) The pooling and selling of loans originated around the same time that FDR created the department of Housing and Urban Development (HUD) to insure loans and generate cash flow. Pooling and selling loans is a way for investment companies and banks to generate cash to continue making new loans. If a bank originates loans, consuming all the cash on hand available to the institution, and has to wait 15-30 yrs to collect back the loan and interest then it has no way to continue serving customers in a loan origination capacity. What happens now is that banks and investment companies originate a loan, service it for a few years, collecting a portion of the amount loaned, interest, applicable customer service fees, etc., then pool together a portion of like loans and sell to another servicing agency generating cash flow to continue making new loans. It has absolutely nothing at all to do with whether an individual believes that the loan originated is good or bad or not. It's a cash tool. As well, many smaller banks and companies can not compete with larger corporate America and are many times forced into business decisions in which they must sell or merge with a large company to stay profitable and increase marketability to more clients. This too can result in a change of servicing on effected loans. Again, this has nothing to do with good or bad origination of the effected loans. It's about continuing to do business and staying profitable. Secondly, your reference to subprime as 'predatory' is again untrue. Subprime loans have absolutely nothing to do with the recent investigations into, and creation of new legislation, concerning predatory lending. Subprime refers to loans which are made to borrowers with less than perfect credit. Individuals who have had credit problems in the past, a history of defaulting on loans, little or no established credit, inconsistent income, and various other indicators of high risk. Subprime equals high risk. Prime equals low risk. This has absolutely nothing to do with predatory lending. Predatory lending is a business practice that is illegal. Subprime lending refers to loans which are made to individuals deemed to be at a high risk for default due to one of many factors, some of which I listed above. It appears to me that you have a very limited understanding of the lending business and some unfortunately preconceived inaccuracies of how the business is handled. The only true statement that you have made is that every single individual out there that believes they are being treated unfairly or charged fees unfairly, should thoroughly read through their loan origination documents. In a perfect world, which this obviously is not and never will be, they would have already read through these and have a complete understanding of the documents prior to signing the contract - but it doesn't work that way very often.

Why do you think that there is so much "selling" of loans and mortgage notes these days? Could it be that the original lender is making bad loan/investment decisions and getting the company in trouble, thus making it urgent to sell loans in order to generate cash? Or could it be that it is more profitable to sell out to someone else? There are indications on this site that original lenders are purposely making it appear that notes are behind for the express purpose of selling the account to a "sub-prime" (read predatory) sevicing company! Folks that have never had a late payment suddenly find themselves contacted by one of these predatory lenders saying that they are months behind on payments. This "error" seems to occur right before or during the transition to the new servicing company. This whole thing sounds like a large conspiracy perpetrated by the original lenders in order to sell out and make a quick buck! What better way than to "create" past due notes for the predators to buy up? This will probably get me tarred and feathered on this site just for mentioning it: HAS ANYONE CHECKED TO SEE WHAT INFO WAS PROVIDED BY YOUR ORIGINAL LENDER TO OCWEN, FAIRBANKS, HOMEEQ, or whatever predatory lender has been sicced on you? You may be surprised to find that the info is full of inaccuracies. It seems beyond probabilty that this many errors can occur during a changeover. I have no love for these bloodsucking companies, BUT if they are provided false information from the onset there is going to be trouble. Check it out folks, your original lender may have sold you out in more ways than one!

Just to set the history on HomEq Servicing straight: To get this right, we have to start with a company once called The Money Store(TMS). The portfolio of loans once serviced by TMS was originally purchased by The First Union Corporation/First Union National Bank in approximately 1998. Subsequently, TMS offices were closed and employees laid off as First Union absorbed the large portfolio of poorly originated and serviced loans from TMS. Out of this acquisition, as a separate loan servicing company, HomEq Servicing was formed. Later, in 2001, First Union Corporation purchased Wachovia Corporation and merged with them taking the Wachovia name. Thus you have the current servicing company, HomEq Servicing, owned by the parent company of First Union/Wachovia Corporation. At the top of every HomEq employees paycheck is the name and address of the Wachovia Corporation. If you have a loan which is now being serviced by HomEq Servicing company, it most likely came from one of a few sources: It is an original Money Store loan. It is part of the First Union portfolio either originated by First Union bank or part of a pool of loans purchased by First Union for servicing. Buying and selling of loans between financial insitutions and servicing agents is a very common practice in today's financial market. It is very rare, and highly unlikely that the day will return when you walk into your local bank, get a loan, and the same institution receives and posts your account payments from origination to payoff. Unfortunately, with the frequency of buying, selling, and transfer of servicing rights on loans in today's market, the quality of customer service suffers. Statements are delayed. Payments can be lost or misapplied. As well, different institutions have different guidelines for servicing which means that if your account is delinquent the options available to you can vary widely. I am providing this information only to assist in setting the history of HomEq Servicing straight. I have read the reports listed against TMS and HomEq Servicing. I have, as well, read some of the responses which are not all accurate in their information. Frequently it is stated, "my loan was owned by 'so and so' and was sold to HomEq Servicing and now it's all behind and it's not my fault". Nine out of ten of these are wrong. Your loan was never sold to anyone else, it has always been part of The Money Store, First Union, Wachovia, HomEq corporation portfolio it's just that the servicing has been transferred to a different group of people to handle. With that transfer, the addresses for payments change, the phone numbers to contact change, the name on your account correspondence changes, but your loan is still owned by the same company. As I stated earlier, unfortunately, the customer service quality is lost and you, the property owner, often don't get the information you are entitled to in a timely manner. As well, it is unlikely that the reason most people are behind is simply because they can't contact someone. Generally, it's due to money mismanagement, poor financial planning, irresponsibility on behalf of the borrower, and in some cases genuine hardship that has been suffered. Most of the loans serviced by HomEq are subprime, B,C & D loans which means that 90% are high interest, high risk loans. That translates into borrowers who have a history of bad financial decisions and default. With that being said, and the history of HomEq Servicing being corrected, I close this reponse.

Michael: I have been reading for (2) days all of these reports and it seems as though you are full of wisdom and knowledge about HomEq Servicing. In this report, you spoke of a HomEq Statement, monthly of course. WHAT STATEMENT? I am a First Union customer that has filed many complaints to HomEq and the last statement that I received was July 2000. I have asked about the statement many times and have been told that I should be getting them. Still waiting and all of the information they have on me is correct, i.e. address, phone numbers. Can you answer that?

the reason that none of the numbers on your contract are correct is because the Money Store is no longer in business...your loan was sold to Homeq, and we sent letters informing all of our customers of this...not to mention that your billing statement each month should have all imperative info.