As if the global financial crisis wasn’t bad enough, now there’s news from the FTC that’s even worse for those suffering through a foreclosure on their home: they’re getting sued by Ditech! Yes, you heard correctly… Ditech Foreclosure Information is being sued by the Federal Housing Commission for improperly collecting payments from foreclosures. According to Bloomberg, more than four thousand homeowners have already complained to the Federal Trade Commission about Ditech. These complaints include claims Ditech didn’t properly credit proper payments to borrowers and improperly pursued foreclosure on homes. It’s not the first time that Ditech has been in hot water over this issue. In January, the company was sued by the Minnesota attorney general for failing to meet state requirements for providing notice of foreclosure. At that time, the company had agreed to change its practices, but has yet to comply with those changes. This latest lawsuit is in addition to a suit filed against Ditech last month by the Texas attorney general. In that suit, the plaintiff, J. Stephen Lanning, claimed that Ditech’s foreclosure machine “does nothing more than attempt to coerce homeowners into selling their homes without providing the opportunity for educated, meaningful alternatives.”
The attorney general’s office called Ditech’s practice “voodoo foreclosure,” saying it fails to give homeowners “the chance to explore reasonable options available to them.” Many experts agree that Ditech’s “short sale” approach is the very worst foreclosure method possible, because it makes homeowners less likely to get a good deal on their homes. Even if they get a short sale, they still may owe a ton of money at the end of the process, plus fees for consulting, and other expenses. With no real alternatives to a Ditech foreclosure, many homeowners will simply lose their homes to foreclosure. A Ditech foreclosure can be very troubling for homeowners, but it’s also very easy to avoid. To begin with, the company offers no formal training seminars or other informative learning opportunities. Instead, all you need to know about Ditech foreclosure is what the company itself tells you. There is also no way to find out how your state’s laws will affect your situation; so basically, there is no reason to trust the company’s judgment about anything.
ditech foreclosure troubles
Another big problem with Ditech foreclosure is that, when compared to the latest best practices for avoiding foreclosure, the company’s techniques are downright antiquated! For instance, the company encourages homeowners to take a second mortgage on their home to pay their first, regardless of the fact that doing so carries significant dangers. Moreover, the Ditech foreclosure machines themselves are primitive by today’s standards, and they’re certainly not up to par. As one former client said, his lender offered him a new foreclosure package after he had fallen behind, but the package required him to list all of his assets, and that caused him major headaches down the road. It is also important to remember that, if you don’t pay off the loan as scheduled, you’ll be hit with late fees and additional fees and costs! When it comes down to it, Ditech Foreclosure is simply a bad choice for any homeowner who wants to avoid foreclosure and keep his or her home. Not only are their methods outdated but the industry they are tied to (the non-profit Ditech Foreclosure) has been exposed as a scam for the last couple of years. Don’t let yourself be caught in this situation, because if you do, it’s sure to turn out badly. Instead, contact one of the many reputable and honest companies that provide foreclosure solutions to homeowners in need.