Loan servicing refers to all the different actions and duties that must be performed after a loan has been approved up until it is paid off. Loan servicing is often performed by a company that specializes in such services, but it can also be performed by the lender as well. It can include such services as:
All of these tasks need to be performed regularly as the bill payments come in. Thus, loan servicing requires much diligence and thoroughness on the part of the servicing company and servicing officers. It is a necessary aspect of major loans such as mortgages.
Loan servicing fraud involves the use of misrepresentation, dishonest statements, or misleading tactics by the servicing company. This can often happen with fake or sham companies that are set up solely for the purpose of conducting loan fraud activities. Loan servicing fraud may involve:
In addition, violations can occur if the creditor attempts to use force, threats of harm, or unfair business practices in order to accomplish loan servicing tasks. All loan servicing actions must comply with state and federal laws.
Loan servicing can result in criminal penalties, such as criminal fines, as well as possible jail time for the offenders. In addition, the borrower may often end up filing a civil claim for damages. This can cover losses caused by the fraud, including unnecessary payments made, legal fees, and lost wages or other costs. On the other hand, damages may be limited or even prohibited if the borrower cooperated with the loan servicer to obtain profit through a fraud scheme.
Loan servicing fraud can result in major losses for the borrower, and in some cases, other parties as well, such as a loan originator or an insurance agency. You may need to hire a lawyer if you need help with legal issues involving loan servicing. Your attorney can provide you with legal assistance when it comes to research, answering questions, and creating legal strategies. Also, if you need to file a lawsuit, your attorney can represent you when you appear in court and in other meetings.
Last Modified: 05-28-2014 11:37 AM PDTLaw Library Disclaimer
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