The findings in this examination report are factual. This report is here presented for informational purposes only and is not to be construed as legal opinion or advice. The reader is advised to consult a competent legal professional in connection with the use of its contents.
Double-Charging of Interest
Number of home loan modification agreements reviewed – 85
Agreements found with double-charging of interest – 49; 58%
Amount of interest double-charged; range - $236.56 to $2,386.17; average - $1,001.64
Number of states with affected modifications – 12
Number of lenders/servicers involved – 19
Range of effectivity dates of the affected modifications – Feb 1 2009 to Jan 1 2020
Estimated effect on the number of loan modifications nationwide:
Total number of reported loan modifications – 5.14 million
Estimated number of modifications with double-charging of interest – 2.98 million
(58% of 5.14 million)
Estimated total amount of interest double-charged – $2.985 billion (2.98 million
multiplied by $1,001.64)
Other findings:
Balloon payment requirement not stated in the agreement (but loan will still have a balance at maturity) – 2 of 44; 5%
Balloon payment requirement stated in the agreement but the amount is not specified – 13 of 44; 30%
No accounting for modified balance – 78 of 78 agreements
Total payments as % of modified balance not disclosed – 81 of 81 agreements.
End of article.
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