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May 14, 2009 10:00 pm US/Central
F-Rated N. Texas Mortgage Co. May Get Taxpayer $$$
FORT WORTH (CBS 11 / TXA 21) ―
A global financial giant is accused of running one of the worst mortgage companies in North Texas.
Late last year, Sheila Williams refinanced her home with Saxon Mortgage Services, of Fort Worth. According to the offer she responded to, there were to be no costs to modify the loan. But Williams says that was not true. She claims Saxon charged her a $1500 fee and "then they were charging me other fees like $9 here and $20 here."
Williams claims Saxon changed her mortgage due date, then charged her late fees, and told her she could skip two mortgage payments during the re-finance. Ultimately Saxon said Williams didn't pay one time. Williams claims the action ruined her credit by causing her credit score to drop by more than 100 points. Williams says it's all because she didn't pay Saxon's collection fee of $20 and that an agent at Saxon told her "get over it".
Fort Worth Better Business Bureau President, John Riggins, says Saxon has had more than 400 complaints in the last three years; earning the company a grade of 'F'. About 75-percent of those complaints were filed in the past 12 months; with most complaints relating to billing and customer service problems.
Riggins says he met with Saxon officials about a month ago and he said "they admitted they had a problem", but the Fort Worth BBB hasn't heard from the company since.
Saxon is owned by financial giant Morgan Stanley, who in October received $10 Billion in the "great bank bailout."
Despite the customer service issues, Saxon applied for and was accepted into the federal government's new Home Affordable Modification Program. The program uses taxpayer money to pay companies, like Saxon, to modify mortgages. Realistically, Saxon could receive millions of taxpayer dollars from the venture.
Check out the list of other companies set to get taxpayer money as part of the Home Affordable Modification Program.
Despite Saxon's business record, the U.S. Treasury Department approved their application. A treasury spokesperson said they did so because, "[We] don't screen out lenders, because if we did then homeowners would be unable to re-finance with their current bank."
Congressman Jeb Hensarling (R) Texas voted against the creation of the Home Affordable Modification Program. He says there have already been cases of fraud and is concerned as to why Saxon, with so many customer service problems, is poised to receive taxpayer money. "There is so little oversight. It's like throwing money out the door," said Hensarling. "It does beg the question, if these facts are true, why taxpayer money is given to essentially subsidize those who may be doing something wrong."
Williams was so angry, she hauled Saxon into court. Although her loan was not part of the new government program, she still felt Saxon should pay for allegedly ruining her credit. Saxons lawyers disagreed telling the judge, "It is our position there is no evidence to justify $5,000 in damages." Judge Luis Sepulveda, Justice of the Peace Court Precinct 5, disagreed and awarded Williams $4,500. "I feel great - a huge victory - I went up against Saxon mortgage and I won," Williams said of the decision.
In a statement Morgan Stanley, on behalf of Saxon, stated it, "Regrets any misunderstanding and is committed to providing exceptional service to our customers."
Morgan Stanley refused to answer specific questions from CBS 11 News.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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