When it comes to annoying lenders and mortgage servicers Saxon Mortgage Services Inc. takes the title as the most annoying, which reflects poorly on parent company Morgan Stanley. We are qualified to make that assessment for several reasons:

(1) We interviewed homeowners with different mortgage servicers.
(2) We examined monthly payments from these homeowners.
(3) None of those examined has been late with a payment.
(4) I called Morgan Stanley general public relations before writing this article
(5) I am still waiting for a return call from Saxon public relations

History: On December 4, 2006, Morgan Stanley (NYSE: MS) announced that it completed the acquisition of Saxon Capital, Inc. (NYSE: SAX), a premier servicer and originator of residential mortgages.

Examining Saxon and Morgan Stanley

Logic dictates that Morgan Stanley could not wait, nor resist the temptation to make money from the mortgage market. Their timing could have been better.

By the second or third day of each month, Saxon automatically starts calling homeowners. The call begins with the message that Saxon is a debt collector, and the call is an effort to obtain information as a debt collector. Homeowners are given the option to pay by Western Union Speed pay. Phone calls originate from 800-594-8422.

When the homeowner speaks to a customer service representative Saxon verifies all information on file. When asked about constant telephone calls from Saxon this was the reply:

“The payment is technically due on the first day of the month. By the second day of the month the payment is technically past due. Homeowners must fax a cease and desist letter to Saxon if they want constant daily calls to stop.

On the other hand, the payment is due on the first, and late by the sixteenth day of the month, just like most other mortgage payments.

Saxon replies to my questions:

When I spoke to Saxon, asking why Saxon prefers to call homeowners, using the debt collector subprime, high-pressure tactic, I received the broken record technique, repeating that the payment is technically due on the first day of the month.

No other servicer, with the possible exception of HSBC, bothers homeowners like Saxon does. The homeowner did not choose Saxon. Regions Bancshares (Regions Financial Corporation) sold her mortgage to Saxon.

The homeowner interviewed is stable, mid-fifties, with a higher than average FICO score, and active in her community. Her opinion is well regarded. She bristles at the thought of receiving calls from Saxon, does not receive calls from any debt collector, and longs for the day when her mortgage was held by a more reputable and well regarded mortgage servicer.

Final thoughts and bad impressions

The entire situation reflects poorly on Morgan Stanley, Saxon Mortgage, and ultimately reflects poorly on Regions Financial Corporation.

This consumer will, by her own admission, never finance a home through Regions, and will never have a brokerage account or any other financial connection to Morgan Stanley. The decision is a direct result of shabby treatment by Saxon.

The homeowner has never paid a mortgage payment through Western Union Speed Pay, and never will. The homeowner has never been late, and has funds available to anticipate and deal with any financial changes. She will never invest those funds with Morgan Stanley.

The homeowner will constantly watch Saxon mortgage for error and omissions. Any violation of FDIC and FDCPA law will be reported immediately. Due to the shabby nature of phone calls by Saxon there will be no exceptions, and no minor infraction will be overlooked.

When I checked with the Fort Worth Better Business Bureau their rating for Saxon is an “F” (Saxon Mortgage Services Inc is located in Fort Worth Texas.)

The last bunch of idiots that called like Saxon does was Kansas City’s own NovaStar. We were glad to see them go bankrupt. (One-time subprime lender NovaStar Financial Inc. will pay $7.25 million to settle securities litigation alleging that the company made false and misleading public statements to artificially inflate its stock.)

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People react in different ways to events in life. While some think of foreclosure as a business decision, others see it as a personal failure. This article shows how some see foreclosure as a life-and-death situation. Our hearts go out to those involved:

A Taunton woman fatally shot herself soon after faxing a letter to her mortgage company saying that by the time they foreclosed on her house that day, she would be dead. The police said the woman, Carlene Balderrama, shot herself Tuesday, after faxing the letter at 2:30 p.m. The mortgage company called the police, who found Ms. Balderrama’s body at 3:30 p.m. The auction was scheduled to start at 5 p.m. and interested buyers arrived at the property in Taunton, about 35 miles south Boston, while Ms. Balderrama’s body was still inside, said Chief Raymond O’Berg of the Taunton Police Department. Neighbors said Ms. Balderrama, 53, her husband and her son had lived in the house for about four years.

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Individual mortage companies have reached out to borrowers in an effort to assist them. Were those initial efforts sincere or driven public relations? The reason we ask the question stems from new reports after the Bush administration got involved. It seems that homeowners are not getting information, help, or the same answer twice. “The governor and the president are putting out information, but that definitely hasn’t trickled down to ground zero,” said Ed Smith Jr., vice president of governmental affairs and industry relations for the California Association of Mortgage Brokers.”

“The feedback we get is borrowers go through the voice-mail rigmarole. The first person they talk to generally isn’t someone who is in a position to make a decision. The customers get put into voice-mail hell” said Smith. One article found on Conspiracy Live’s website says little has changed. If the customer has not missed a payment the mortgage company will not talk to them. “They want us to ruin our credit before they agree to speak to us” said one home owner.

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An AMT in Pennsylvania said “Its been confimed to me that half of the closings are in California and New Jersey. The other areas that are going to be hit are areas that in the past few years have seen very high appreciation and are now seeing very high depreciation. Four divisions (out of the current 18) are being “dissolved”. The exact announcements and locations of each branch along with employee termination will be revealed NO later than the week of December 10th, just in time for Christmas.”

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