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.)