You most likely do a lot of research when you buy a new computer or a flat screen TV, but what about when it comes to a home loan? The No. 1 complaint with the Illinois Attorney's General Office last year was about problems with lenders.
"It blows me away," Guy Schingoethe said. He's frustrated with his lender Ocwen. He said the home loan company failed to pay his Cook County property taxes out of his escrow account. His loan was originally with Chase, but sold to Ocwen.
"How do you get satisfaction when you are dealing with what to me feels like a ghost company? There is no one specific to talk to in America," he said.
After several months of calls and emails about the issue, Ocwen cut Schingoethe a $5,000 check and called it an escrow refund. However, that wasn't enough to cover late penalties and fees added on, after his taxes were sold to another bank.
Days after the I-Team called Ocwen, a March billing statement indicated the taxes were paid in full, including late fees. An Ocwen spokesperson and a document obtained from the Cook County Clerk's Office confirmed it.
"In Illinois it is unlawful, it's unlawful for a servicer a lender to not, to forget or not pay the property taxes from an escrow account," Manuel Flores, Illinois Department of Financial and Professional Regulation, said.
Flores, acting secretary of the Illinois Department of Financial and Professional Regulation, says Schingoethe is not the only customer complaining about Ocwen.
The Central Florida Better Business Bureau gives it an "F" rating and there's a recent national settlement order between the Consumer Financial Protection Bureau and Ocwen Financial Corporation. It alleges misconduct, unauthorized fees, deception and wrongful foreclosures. Twenty-five thousand Illinois residents will now get mortgage relief or cash payments from Ocwen.
"We are trying to bring relief to individuals who may have been victim to some kind of unlawful business practice," Flores said.
The settlement was approved by a judge in February. Ocwen didn't admit any wrongdoing, but said the company's goal is to help struggling families keep their homes.
Flores says another problem his agency is seeing with several different lenders, people struggling with high interest rates.
"Those are cases where people may end up losing their homes," Flores said.
The IDFPR is working with Hazel Crest resident Norma Brown to stay in her home, and reduce a 9.78 interest rate.
"If they take it, they can have it. I don't care, because they are going to lose my monthly payment. They are going to lose me paying for this house," Brown said.
To avoid high interest rates and potentially questionable loans, consumers should know their credit scores before shopping. Another source for advice: a realtor.
"Find out who they have done loans with. Who are clients who have been happy for the last five years. Someone who is reputable and been in the industry for a while," Matt Farrell, president Chicago Association of Realtors, said.
In many cases, it's common for banks to sell a mortgage. Home loan experts say you can tell your lender you don't want your loan sold to another bank. However, you will pay a higher interest rate.
Another tip: if your interest rate ever changes at the closing table, don't sign the contract.
Additional information:
idfpr.com/consumers.asp
illinoisattorneygeneral.gov/consumers/filecomplaint.html
