Ohio AG Goes after Barclays Capital Real Estate, HomeEq Services for Unfair Loan Modifications

The Ohio Attorney general has gone after Barclays Capital Real Estate operating under HomeEQ Servicing for several issues but one of them was an attempt to get Ohio consumers seeking loan modifications to sign agreements that included provisions for the borrower to:

  • Waive all defenses, claims or offsets with respect to the unpaid principal balance as adjusted by HomeEQ to reflect any unpaid interest, late charges, fees, costs, and advances for property taxes and/or insurance premiums.
  • Release HomeEq from any claims, damages or liabilities of any kind which are in any way connected with the origination and/or servicing of the loan and/or the events which resulted in the borrower entering into the Loan Modification Agreement.
  • Waive any rights under federal or state statute or common law providing that a general release does not extend to claims which are not know to exist at the time of execution.

For some borrowers who were suffering with money troubles, HomeEq wanted them to sign a Forbearance Agreement which required the borrower to:

  • Agree that HomeEq can recommence foreclosure proceedings without providing the borrower and further demand/notice or intent to accelerate if HomeEq determine that borrower is in default of the Forbearance Agreement.
  • Agree in advance to pay any additional foreclosure fees for property inspections and/or broker price opinions charged at HomeEq’s discretion.
  • Permit HomeEq to advance any pending foreclosure action to prevent its dismissal during the term of the Forbearance Agreement.
  • Waive the statute of limitations associated with the acceleration of the loan.

The Ohio Attorney General states that HomeEq is also guilt of providing horrible customer service to the very same people they had sign these grossly unfair agreements. HomeEq is accused of:

  • Losing documents submitted by borrowers requesting loss mitigation assistance leading to a delay in processing borrowers’ loss mitigation request and resulting in the borrowers having to resubmit documents.
  • Failing to respond, or timely respond, to borrower requests for assistance.
  • Filing foreclosure actions against consumers while those consumers were in active and ongoing loss mitigation negotiations and/or discussions with HomeEq.
  • Verbally offering and implementing a repayment or forbearance plan without putting the agreement in writing with all of the terms and conditions.
  • Failing to offer, or timely offer, affordable loss mitigation options to borrowers.
  • Requiring borrowers to sign loan modifications with unfair and unconscionable provisions that are unconscionably in the favor of HomeEq.
  • Purchasing forced-placed insurance to cover homeowners’ dwellings when such insurance was not necessary or justified and where such insurance was duplicative of valid insurance that already existed to cover homeowners’ residence.
See also  Trail Loan Modifications Trash Credit Report and Credit Score

You can read the original complaint against HomeEq, here.

The irony is that the level of service the Barclays customers got sounds about in line with what others are reporting from a wide range of mortgage companies.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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