Recent years have seen a flurry of proposals and legislation directed toward predatory mortgage lending. The focus, however, has been almost entirely on loan originations. Aside from a few well-publicized lawsuits, predatory servicing has attracted little attention, yet in many respects it is more vicious, and the adverse consequences are more far-ranging. The loan origination market is a minefield for borrowers, to be sure, but they do have choices. Exercising intelligence and care, and with a little homework, they can find a loan provider who will treat them fairly. When the loan is closed and shifted to a servicing agent, however, the borrower's choices disappear. Borrowers have no say whatever in choosing the firm that will be servicing their loan. They cannot fire that firm for cause, no matter how wretched the firm's service. The only way they can extricate themselves from a predatory servicer is to refinance, which is costly, with no assurance that the next servicer will be an...
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