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A little history: The Hundred-million-dollar Hang-up

In early November of 2000, a “customer service” representative for a large mortgage servicing company almost single-handedly launched a process that eventually cost his employer and its owners at least one-hundred million dollars in fines, lawsuit settlements and lost business.

Like his fellow servicing representatives, the employee had been trained in what was cleverly named “combat collections,” which among other things, empowered collectors with the idea that whatever was on their computer was right no matter what. They were also conditioned to believe that if the borrower disagreed with them, the borrower was just a deadbeat trying to get out of paying.

By demanding an enormous amount of money (which wasn’t actually owed), loudly threatening to take the borrower’s home and then hanging up, that employee also turned the borrower into a consumer advocate.

©Copyright 2006   Certus LD LLC.

Reproduction in any form without written authorization is prohibited

Unlike many victims, W. Craig Kenney had the resources to put up a protracted and highly-public legal battle, and he was one of the pioneers in using the Internet to fight back. Not long after the incident, Kenney’s web site attracted tens of thousands of visitors, many who thought they were the only ones suffering from abuse of their rights.

The web site and its stories of mistreatment of borrowers eventually attracted enough media attention that both of Maryland’s Senators formally prodded the FTC and HUD to actually do more than listen to the growing number of complaints. A formal investigation began in March of 2003.

Three years after the hang-up, settlements with Kenney and other plaintiffs as well as the FTC, HUD and dozens of class action cases were finally reached. The servicer was required to pay $40 million dollars in restitution to victims who opted in to the settlement plus another $15 million in other charges. The former CEO personally paid $400,000 and was barred from engaging in mortgage lending or servicing-related business. Several more millions in other settlements in various states followed.

Once one of the largest of the sub-prime servicers, the company suffered a dramatic decline in obtaining new servicing rights. In addition to the numerous executive and management changes, hundreds of employees were let go. Two major facilities were closed. The company changed its name to and was eventually sold to financial conglomerate CSFB.

The emergence of Certus LD, LLC.

Kenney continued working quietly behind the scenes to assist borrowers who were experiencing problems with the company. At the same time, he came to the realization that the historical method of fighting lending and servicing issues through civil suits was not only ineffective, but counter-productive; lawsuits were only draining consumer resources. Kenney and Dave Mortensen founded Certus LD in the spring of 2004 as a publishing and intellectual property management company. In 2007, Kenney and Mortensen turned it into a Limited Liability Corporation (LLC).

Certus commissioned the development and production of borrowerHelp.com’s first book, The Mortgage Survival Kit in early 2006 and its first printing occurred in January of 2007. A consumer-printable download version is now available on lulu.com.  (For information about the Mortgage Survival Kit, click here.)

Borrowerhelp.com’s future publications will focus on other consumer lending issues.