Wednesday, February 1, 2012

Correspondence With NE Dept. of Banking & Finance

Below is the correspondence between the Nebraska Dept. of Banking and Finance and me. Here is my initial letter to them (sent February 23, 2012, a follow-up to the original complaint filed originally to the NE State Atty General):

Mr. Munn,

I have an active complaint with the NE Department of Banking against PHH Mortgage.  PHH is attempting to fraudulently foreclose on my home.  They have accepted my payments, but not applied them to my loan.  My loan payment is just over $1000 a mont, and PHH is currently holding over $6000 in un-applied payments.  Despite them confirming they have my money, they are moving forward with foreclosure, destroying my credit, and creating a very stressful situation for my wife, daughter, and I.  On top of this, I bought my house in 1999 for $95000, today despite never taking a second mortgage and living in the house for 13 years PHH is claiming my payoff amount is $110,000 - with no equity gained in 13 years.  

I should get a lawyer - right? That is one of my problems - we've spoken to a dozen lawyers.  Nebraska laws are written to protect businesses not consumers.  With no possibility of punitive damages, any lawyer wants a significant retainer to take the case.  Significant as in $20,000 - $30,000.  Also, since Nebraska has changed from a judicial foreclosure state, no judge has to review the process to make sure it is legitimate.  We have contacted PHH, we have requested assistance, explanations, government aid with the various programs, but we receive no response.  We did receive the application for assistance form - but no response after completing it.  We have contacted them under RESPA - requesting our original loan docs, and nothing.  We have requested information under MERS - no response.  We have disputed information they are reporting to the credit bureaus and no response.  So RESPA and the Fair Credit Report Act have been violated, but we can do nothing about it.  We made our payments - our banks have confirmed the payments - hell the mortgage company has confirmed receiving most of the payments - they just refuse to apply them.

PHH has prevented me from calling them to even discuss my situation - as this video that I made illustrates -

I realize you are concerned with Nebraska - but here are some stories of how other states have stepped up to address this issue - options not available to me as a Nebraska resident.   (not applicable since NE is a non-judicial foreclosure state)  (since our Atty Gen forwarded my complaint to the Office of Comptroller - instead of the Dept of Banking doubt he will do anything - but we've asked)

A final article to demonstrate that I am not the only person PHH is doing this to:
The exact same thing is happening to me as is happening to this family.

We need help, not lip service.  More importantly, the 1100 people that have taken the time to report abuse, mistreatment, fraud, or other wrong doing by this company - need justice.  We'd like to see criminal charges filed against Luke Hayden, Martin Foster, Bill Brown, Walter Wronka, James Eagen, and other executives at PHH - instead of letting the individuals committing the crimes continue to do so with immunity.  We'd like to see PHH charged with fraud and lose their ability to victimize other Nebraskans.  We'd like to see the elected and civilian members of the government of Nebraska stand up for its residents.  

Please do what you can to help us, or point us in the proper direction for assistance.  HUD is not an option - we went that route and discovered the head investigator had financial ties to the mortgage industry - including PHH, the company she was allegedly investigating.  When we pointed this out, they complained about me.  We need real assistance.  We need action - not form letters and passing off to other people.  Please help us.

Thank you,

Matt McDermott
Kearney Nebraska

Here was their response:

My response was as follows:

Dear Mr. John Munn,

Thank you for writing me back, I appreciate you taking the time to do so.  I read your response and I am confused.  As the director of the Department of Banking, surely you are aware that your Department has the ability to prevent a company that can be proved to be committing fraudulent acts from doing banking business in the state of Nebraska.  Your office has the ability to protect Nebraskans from fraudulent companies, and has the ability to prevent these companies from doing business in the state. 

I never asked your agency to determine compliance with federal laws, but I did reference federal laws as part of the evidence against the company.  After all, do you want a company that knowingly violates federal consumer protection laws able to do business in your state, and harm the residents of Nebraska? If I were a public official – whether elected or simply compensated by the tax payers of my state – I’d make it a priority to look out for them.

Had you actually looked into my complaint, you would’ve realized that my mortgage company won’t talk to me.  They are practicing what has been clinically confirmed by a medical professional as emotional abuse against one of the residents of your state.  It’s ok – Nebraska doesn’t have any laws protecting me against this abuse.  Nebraska doesn’t have any laws protecting me at all – I can’t take them to court, because I can’t get my legal fees reimbursed, I can’t sue for damages, because Nebraska considers destruction of my credit history to be punitive – not actual – damages, I can’t wait for a judge to review the foreclosure and rule it fraudulent (as was done in NY and IL – against this very company) because Nebraska changed to a non-judicial foreclosure state.  Over the last 15 years Nebraska has changed or passed multiple laws to make it almost impossible for the average citizen to defend themselves against a big business.  So your office finding someone at the mortgage company isn’t what I have asked for assistance with.

I am fully aware that your Department is unable to assist me in stopping the fraudulent foreclosure.  I am asking your department to make Nebraska a safer place for Nebraskans to do business, and to protect the people instead of the businesses.  Your office can stop PHH from doing business in this state.  Your office can fine PHH $5,000 per day for non-responsiveness.   Your office can make a difference, if the government of Nebraska decides that protecting Nebraskans should be the priority instead of protecting the businesses.  I am not optimistic that this will happen, but it is the right thing to do, and it is possible. 

Your letter misrepresented facts.  I do not expect constant communications.  I do think waiting now 3 weeks for a return phone call is unacceptable.  I appreciate the workload, and if 45 Nebraskans are requesting help, perhaps the process by which the department allows businesses in, needs to be reviewed.  You have one person assigned to help the citizens, how many are assigned to help the businesses?

You are also misstating facts.  The email on February 17th was a new complaint of wrong doing.  As were most of the 80 emails.  Additional evidence of fraud.  I have copied the DOB.COMPLAINTS address on emails to PHH so they are aware that my state’s government is involved.  However, my response to PHH was dated January 31 – and the clock starts on that day.  The 21 days are considerably past and your department, being very business friendly, may prefer to use every possible excuse and opportunity to extend PHH’s deadline, the fact is their deadline expired 21 days after January 31st.  Perhaps if you would fine the companies that break the laws, instead of researching loopholes to extend their deadlines you would have fewer complaints – or be able to hire more people to handle them.

Your brief review is also incorrect.  PHH did not quit accepting payments.  They quit applying payments.  PHH is currently holding more money than they claim is due, yet they still wish to foreclose.  PHH is not crediting my account for the money they have accepted, PHH is not paying me interest on this money, PHH is damaging my credit, while they earn interest on my money. 

I agree that I am at a disadvantage.  I live in a state that passes laws to protect businesses from the citizens they harm.  In NY, IL, GA, among others the citizens have been able to fight back.  CA is widely known for its pro-citizen laws. The bank that my loan was through, US Bank, sold the loan to Cendant, who became PHH.  US Bank has no ownership of my note, and PHH claims to be the owner and servicer of the note.  Although in Nebraska, the note is in reality held in trust by a title company – the name of which PHH will not disclose despite numerous requests, including those under RESPA. 
Also I am not past due.  PHH’s attorney has documented a payment history that is missing payments confirmed by PHH’s Executive Vice President of Mortgage Services, Martin Foster, and payments confirmed by an Executive Vice President at American National Bank.  The payments Ms. Hawk, Mr. Foster, and Mr. LaFollete have confirmed total more than the minimum payments due.  You also mention partial payments.*

This email came from Marge Sherrer in the office of the President of PHH mortgage on March 10, 2009:
If you continue to send in partial payments they will be
 applied to
 suspense or applied to principal as I stated in my previous
 email. We do
 have a program called FlexPay that may be a good solution
 to this issue.
 I can send the information out to you.”
Please notice it does not say, “please do not send in partial payments” or “partial payments will not be accepted” it says – if you do partial payments they WILL BE APPLIED.  If there was an issue with partial payments in late 2011, where was the communication to that affect, and why were they accepted just fine for over two years with no issues.

This is in response to your letter, and is not intended to buy PHH more time, so if you feel this would do so, than simply shred it.  My intent is not to give a loophole to a company, I live in a state that has a government to do that for me.  This is simply meant to inform you of the inaccuracies of your note.  Also, please save your office and the tax payers money, if you respond do it via email. Save the stamp, the fancy letterhead, the environment.

Lastly, I have pasted my original email below, as you can see it doesn’t reference constant contact, or many of the other things you mentioned.  The crux of the issue is you have an out of state mortgage company with a publicly documented history of abusing customers, ignoring laws, falsifying documents that is being investigated by their home state for illegal activity – and you have a lifetime resident of your state asking for protection – not for himself, but on behalf of all 1.8 million Nebraskans – from predatory and abusive companies like this.  You have the power and the evidence to prevent them from hurting anyone else in Nebraska.  Please demonstrate that you care about the people of your state, by taking action to stop PHH.

*What is meant by partial payments: the Office of the President of PHH Mortgage allowed me to make 2 payments a month - on the 1st & 15th, in amounts that ultimately were higher than a single monthly payment would have been. In essence, I was making one full additional payment a year by making 2 payments a month that were approximately $80 a month extra. This is a standard option among mortgage companies and servicers, designed to help save the consumer money in the long run because you pay your mortgage off faster, thus paying less interest. Payment overages were put into an escrow suspense account so that in the event I made a payment that was slightly lower than what the full monthly payment should have been, this suspense account would make up the difference by applying the funds from that account. To date, PHH shows that I still have over $200 in this escrow account that are also unapplied.

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