Family averts foreclosure from under-fire servicer

by MPA17 Sep 2013

A California family is staying in its home after a local TV station’s investigation demonstrated that they had been illegally foreclosed on by a company that’s been under scrutiny for hasty foreclosures before.

Ceith and Louise Sinclair bought a home in Altadena, Calif., in 2003, according to KABC-TV. Last year they applied for and received a loan modification from Ocwen Financial Corporation. Then they were notified that Ocwen had sold their loan to Nationstar Mortgage.

In June, Nationstar informed the Sinclairs that their house had been foreclosed on.

"They came and knocked on our door. That's how we found out our house had been sold," Louise Sinclair told KABC. 

The Sinclairs told KABC that they hadn’t received any notice of foreclosure prior to that moment. They were told they would have to vacate the house in two weeks, and were expected to pay rent in the interim, KABC reported.

The scary part? The Sinclairs had never missed a mortgage payment, and they had the documentation to prove it, according to KABC.

The Sinclairs told KABC that numerous calls to Nationstar failed to resolve the situation. "Every time we call them back, they give us the run-around, saying call back in two days, call back in two days," said Louise Sinclair. 
After KABC showed Nationstar documentation proving the Sinclairs were current, however, the servicer changed its tune.

"We are very sorry for the situation Mr. Sinclair was in, and we deeply regret the difficulty he experienced,” Nationstar said in a statement.“As a result of KABC bringing this situation to our attention, we were able to expedite our review and take two important steps. First, we have rescinded the sale of the home, which means Mr. Sinclair will not have to leave his house. Second, we are going to honor the previous loan modification that was put in place."

This isn’t the first time Nationstar has been under scrutiny for unscrupulous mortgage servicing practices, however. In May, the company was sued by investors who claimed that Nationstar was simply foreclosing on loans rather than servicing them.
Mortgage bond investor group KIRP LLC claimed that Nationstar was auctioning home loans backing securities for quick cash rather than servicing the mortgages to give investors greater returns over time, according to a Bloomberg report.

“Nationstar has not fulfilled its duties as master servicer but rather has engaged in practices to enrich itself at the expense of” investors, KIRP claims in the suit.

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