Mortgage Servicers Role in Real Estate Nightmare

As the foreclosure process comes under nationwide scrutiny, judges are questioning how servicers calculate amounts owed on loans. Some borrowers claim they lost their houses because of bungled payment processing and accounting. And there are growing worries about whether important mortgage documents were recorded properly, especially on loans packaged into securities.  Even before the mortgage meltdown, the servicing industry “was plagued with problems,” such as servicers charging unauthorized or excessive fees and making false or unsubstantiated statements about how much borrowers owed, says David Vladeck, head of the bureau of consumer protection at the Federal Trade Commission, which has brought several recent cases against servicers. 

Wall Street Journal 10/16/10