Adapted from Borrowers Face Dubious Charges in Foreclosures - New York Times <http://www.nytimes.com/2007/11/06/business/06mortgage.html?hp=&pagewant\ ed=all> , November 6, 2007
Companies instigating foreclosures may be taking advantage of imperiled borrowers. Bankruptcy specialists fear that some consumers may be losing their homes unnecessarily or that mortgage servicers, who collect loan payments, are profiting from foreclosures. Bankruptcy specialists say lenders and loan servicers often do not comply with even the most basic legal requirements, like correctly computing the amount a borrower owes on a foreclosed loan or providing proof of holding the mortgage note in question. In an analysis of foreclosures in Chapter 13 bankruptcy, questionable fees had been added to almost half of the loans, and many of the charges were identified only vaguely. Questionable practices by loan servicers appear to be enough of a problem that the Office of the United States Trustee, a division of the Justice Department that monitors the bankruptcy system, is getting involved. Fees for legal services in foreclosure are also under scrutiny. A class-action lawsuit filed in September in Federal District Court in Delaware accused the Mortgage Electronic Registration System, a home loan registration system owned by Fannie Mae, Countrywide Financial and other large lenders, of overcharging borrowers for legal services in foreclosures. The system, known as MERS, oversees more than 20 million mortgage loans.
