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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

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Disreputable mortgage service

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email asktony@tonynovak.com.

Q: I read your article on Wilshire Credit. We have had problems with them for years. We found out the mortgages are really held by Merrill Lynch & Wells Fargo.

A: Unfortunately there is nothing that a borrower can do to prevent their mortgage loan from being sent to a disreputable service agency. Any mortgage lender is free to sell its loans to investors like Merrill Lynch. The borrower has no power to control what company the investor uses to service the loans. These companies have a financial incentive to prevent you from refinancing your loan by making false credit reports to the credit reporting bureaus. Since publishing an exposť on Wilshire Credit Corporation last month, many readers across the country have responded with similar stories. Apparently Wilshire Credit is the evil cousin of other giant well-known financial companies. Merrill Lynch has been named as the "silent" owner of the loans, but this is the first time that a reader mentioned Wells Fargo as an affiliate in this scam. Wilshire Credit is known for taking over the mortgage service on loans issued by other reputable lenders without the borrowers' knowledge or power to affect the change. Then they create havoc through a variety of shady tactics that can damage a borrower's credit rating and prevent the borrower from refinancing at lower rates. Several states have open investigations of Wilshire Credit complaints so if you have problems make sure that you have filed a complaint with your Attorney Generals' office. But in the bigger picture, it seems that this issue could only be resolved with additional consumer protection legislation at the national level.

Summary

More resources:

Wilshire Credit Corporation Fraud