Saving yourself from predatory mortgage servicers -- p 2

Cipollone, who advised Fairbanks on that action plan, says the loan servicer embraced the changes enthusiastically. "But I haven't yet seen it trickle down to the level where the homeowner can call up and get (a problem) settled with a few phone calls," she says, adding that she expects that situation to improve.

The settlement with Fairbanks Capital is a hopeful sign that abusive servicing practices will get more scrutiny. But government agencies don't employ enough investigators to police the mortgage industry adequately even when they want to. The Office of Thrift Supervision, which theoretically polices servicers such as Ocwen Financial Corp., conducts little meaningful oversight, critics complain.

How, where to complain
Complaining to the government is not the first step to take when you run afoul of an abusive mortgage servicer. The first thing you should do is call the customer service department and write a complaint letter. HUD has a sample complaint letter on its Web site; make sure the letter emphasizes that it is a "qualified written request under Section 6 of the Real Estate Settlement Procedures Act."

Do not send the letter in the same envelope as a payment.

The address and phone number for the company's customer-service department should be printed in the coupon book or the monthly bill. Explain the problem succinctly and propose a solution. For example, if a mortgage servicer bills you for homeowners insurance, but you already have a policy, provide proof that you have a policy, and explain that you want the servicer to cancel the redundant policy, stop billing you, refund any money you have paid, and cancel all late charges connected to the policy.

If the servicer does not resolve the problem within 60 days, let loose a barrage of government agencies. If you're lucky, one or more might take action. Start with your state's regulator -- the banking office, consumer protection office, attorney general or another agency.

Help on the Web
The Mortgage Bankers Association offers a Web page that allows you to type in your ZIP code and find out which state and federal offices to contact. Type your ZIP code in the window at the bottom of this page; you don't have to answer the questionnaire.

The Community Law Center in Baltimore devotes this Web page to the issue of abusive loan servicing.

Moving to the federal level, file a complaint with the FTC by calling (877) 382-4357 and HUD by calling (202) 708-4560.

The National Community Reinvestment Coalition, which helped Fairbanks draw up its new operating guidelines, accepts complaints about rogue servicers and sometimes acts as "a private attorney general," in the words of David Berenbaum, NCRC's senior vice president for policy. The nonprofit has a complaint line at (800) 475-6272.

Finally, you can file a lawsuit. The law firm of Lieff Cabraser Heimann & Bernstein is investigating complaints about Ocwen Financial, and other loan servicers could become targets of class-action lawsuits.