Phone Sex and Mortgage Servicing
Question: What do mortgage servicers and phone sex have in common? Answer: They both cost $9.99 a minute.
This is just one of the findings Professor Katie Porter documents in a new study of mortgage servicer practices. Most of the things that servicers do never see the light of day. People grumble--and keep on paying. But when homeowners file for bankruptcy, the paperwork is a matter of public record, and it is supposed to show all the charges. And there it is: $9.99 a minute to talk with the mortgage servicer to try to get the mortgage servicer's own mistake corrected.
Mortgage servicers get paid by the mortgage lenders for collecting money and working out deals with those in trouble. But most mortgage servicers can eat what they kill--that is, they can keep whatever fees they can squeeze out of the customers. That creates one more middleman whose interests are at odds with those of the customer. The bankruptcy records show that some mortgage servicers have gotten very creative.
What a deal! Make a mistake, then charge the customer for trying to get it fixed. No need for heavy breathing. When it comes to making a profit, this is better than talking dirty.
what industry isn't like this?
To boldly go...
October 24, 2007 9:18 AM | Reply | Permalink
This seems very extreme for any industry. Almost $10 per minute? at that rate a 10 minute call would be $100. Come on even cell phone plan overages are only 49 cents a minute?
It seems like they are really milking this. No wonder my bank (Chase) selling point is they don't sell your mortgage. If servicing fees are that outrageous, then this could be worth a lot of money.
This seems particularly outrageous because once you are in the mortgage, the only way to get out from under that servicer is if by chance your loan is sold, or if you refinance. Refinancing does not guarantee you won't be subject to these onerous fees by the new servicer. It also costs a pretty penny to refinance. Nothing like a captive customer. (That is why I like my cellphone company Alltel at least you don't have to sign a new contract just to change your plan, much better than Verizon. Verizon and most capture you and then the hit you with horrible billing that they never fix. If you are not satisfied you pay them $200 to take your business elsewhere. Bad Deal!)
Consumer Protections are clearly needed in this area.
Too bad everyone is going to be busy trying to fix the constitution instead. We shouldn't be in this mess.
MsAnnaNOLA
New Orleans, Louisiana
October 24, 2007 11:13 AM | Reply | Permalink
"Come on even cell phone plan overages are only 49 cents a minute?"
isn't an itune 99 cents for several minutes of audio? they need to charge $9.99 because it costs money to have a human on the other end of the phone. what if they charged nothing? would they have to listen to complaints all day long?
i'm not saying the situation is nice but several years ago I enititled my memoir "my life as a prostitute" since I felt like I was servicing everyone else and didn't have time for myself.
at this stage in my life, I tend to put a price on my time and if you pay that price, you have my time.
I heard a commercial today that had the tagline: "productivity and creativity on my terms" so my feeling must be shared by millions of others.
certainly, bankruptcy sucks and that's why I'm a happy renter. maybe folks will learn not to give away their liberty in exchange for lipstick coated debt.
To boldly go...
October 24, 2007 12:07 PM | Reply | Permalink
mcs, are you out of your frigging mind? $600 dollars an hour to fix a mistake?
Like all businesses, they have to hire people to service their customers, not to gouge them.
October 24, 2007 12:33 PM | Reply | Permalink
If you're paying $9.99 per minute for phone sex, you are being over-charged. Check the back of any magazine. I think the going rate is about $1.99 these days.
October 24, 2007 2:00 PM | Reply | Permalink
Well, I am willing to bet that those $500 glasses were manufactured for no more than $4. The markups for just about everything are becoming truly incredible. Price inflation has hummed along at 2% to 3% for the past ten years (using the new methodology that under reports it) and production costs have been cut by 75% or more by shifting production outside of the US.
That mortgage servicer call agent if inside the United States probably gets $14 an hour. If outside of the United States, probably gets between $1 and $2.50 per hour. To charge $600 an hour for that agent's time is pretty excessive.
And then to make it even more obscene, prices are raised while credit is offered to encourage even more outrageous disconnects between production cost and the ultimate profit realized by a product.
But that's capitalism. The goal is to sell the cheapest possible things for the highest possible price and that requires tricking people and also, now, using finance to squeeze just a little more out of them. Most of the "name brand" clothes we wear are made in China for $1 and sold here for $100. But because the labels are now on the outside, production costs and utility are ancillary. The focus is on how the product transforms us into a certain category of "lifestyle" which is a big lie perpetuated to get people to buy $4 eyeglasses for $500. I know, "only the finest plastic and base metals!" but they still only cost $4 to make.
October 24, 2007 11:10 PM | Reply | Permalink
You're apologizing for these guys? It's OK because they get away with it?
October 25, 2007 5:19 AM | Reply | Permalink
you might want to go to The Mortgage Lender Implode Meter and see how many mortgage lenders have become insolvent.
it's not clear to me who becomes responsible if the lender becomes broke or is close to broke.
the bigger question: "is the servicer guilty of fraud and/or liable if they don't update your records after becoming aware of the incorrect data?"; i.e., if I was in that situation, I'd simply send them some registered mail with the corrected information.
and, maybe i'm too rich, but the $600 might be a cheap price to clear things up and move on with my life. the glasses i'm wearing cost me $500... I'll get the next pair off the internet. but, in general, life ain't cheap any more.
To boldly go...
October 25, 2007 8:56 AM | Reply | Permalink
no, I'm not apologizing for those guys but you've probably read my critique of Ms. Warren's employer, MIT, in the past.
MIT, as you know, has a huge endowment which "returned," I think, 30% this year. so Ms. Warren gets paid through, essentially, a national sales tax which is collected through "investments."
one can say that MIT is educational so it's OK to raise prices (regressive taxation) to fund MIT or, like me, you can think that MIT is leaching off the wealth of the poor w/o promising them anything in return for their sweat equity.
as I've said in the past, "everyone has to find a way to make money." Is one way better than another? Beauty is in the eye of the beholder.
To boldly go...
October 25, 2007 10:45 AM | Reply | Permalink
and your comment illustrates my observations about Ms. Warren's employer, MIT! i.e. They own stock, and other assets, and expect "big returns" on "their investments."
unless the ethics change at the top-- i.e. at places like MIT, they're certainly not going to change with bottom feeders such as morgage servicers.
To boldly go...
October 25, 2007 10:48 AM | Reply | Permalink
, life ain't cheap any more.
~~~~~~~~~~~~~~~~~~~~~~~~~
What?? Does that mean I won't be able to get one of those $39.00 fridges? LOL!
Bonnie
http://pupart.1hwy.com/
October 25, 2007 12:32 PM | Reply | Permalink
MIT is irrelevant to the question and the arguments. Why you have such an attitude towards them as opposed to any university is not apparent.
October 25, 2007 12:45 PM | Reply | Permalink
you can get one just around the corner from where I live!
my biggest mistake with my eye glasses was that I bought a pair that had nickel in the frames and, apparently, I was alergic to nickel. the only way I could change frames was to pay the difference between the first frame and a titanium frame that they had in the store and it was a lot of bucks.
in the future, I know that I need titanium and I'll be going someplace else. you can get a complete pair online for $150 or less.
thankfully, I'm frugal and the unexpected expense was no big deal...
To boldly go...
October 25, 2007 3:15 PM | Reply | Permalink
MIT is irrelevant to the question and the arguments.
that's your opinion. I think they're bigger leaches than mortgage servicers.
Why you have such an attitude towards them as opposed to any university is not apparent.
I mention MIT since Ms. Warren works for them yet muckrakes against other companies and implies they're greedier.
I was surprised to see that St. Thomas University wouldn't let Desmond Tutu speak and, guess what?, they're in the middle of a $500 million dollar "Open Doors" campaign. What a paradox! I'm assuming that a large part of those funds will wind up in an endowment and it pisses me off because I'll have to support that university each time I buy something...
A few weeks ago, the WallStreet Journal was blogging about these endownments since they aren't taxed, etc...
To boldly go...
October 25, 2007 3:31 PM | Reply | Permalink
One way or another, you're getting screwed, AND you're paying for it! LOLOL
October 26, 2007 9:40 PM | Reply | Permalink
This is cutting and pasting from a website:
Phone sex:
Prices:
$ 30 for 15 minutes
$ 60 for 30 minutes
$ 90 for 60 minutes
Live cam (on-line strip-tease):
Prices
10 Minutes $30
15 Minutes $45
20 Minutes $60
30 Minutes $75
45 Minutes $90
60 Minutes $120
I never tried, so I do not know if you pay more for audio and video combined.
I bet you can get real sex for less that 9.99/min. The story about the divorce of Richard Scaife in WP reports that his flame was arrested 10 years ago for offering sex for 250 dollars, which perhaps included 25 minutes.
October 27, 2007 1:09 PM | Reply | Permalink
I posted the same thing, but then I started to think: can it be that like in the case of dry cleaning, women pay more?
October 27, 2007 1:11 PM | Reply | Permalink