*Litton Loans is not affiliated with Litton Industries or Littoncorp.com in any way.
Litton Loan Servicing LP is affiliated with C-BASS, which is a credit service company. This means that Litton Loans is both a loan and mortgage service and a credit bureau/collections company. Recently, Litton Loans has been buying a lot of mortgages on the market; many of these loans are subprime loans issued to people who have credit problems, and thus cost less on the dollar than loans to those who have good credit. Litton Loans uses its credit bureau expertises through C-BASS to ensure payment of these loans.
Larry B. Litton started Litton Loans in the 1980s, when Texas was having some real problems in the real estate market. High rates of delinquency, default, and bankruptcy were causing banks to unload mortgages with less-than-ideal credit-rated mortgage holders at less than the going rate. Litton started using credit collections techniques on the mortgages it bought up, making loan delinquencies on the notes they held go down. And because Litton Loans was purchasing notes at less than the going rate, foreclosing on these mortgages was not as much of a hardship as it might have been on the banks originally holding the mortgages.
However, like any other loan agency, Litton Loans was much more interested in getting money from the mortgage holder than going into the real estate business. They started holding neighborhood meetings to provide homeowners with information about alternatives to foreclosure. This enabled customers to work with Litton Loans, instead of viewing them as an adversary, at least under ideal circumstances.
In 1996, Litton Loans merged with C-BASS, a credit default management company and collections bureau. The partnership has made Litton better than most mortgage companies at curing default issues without foreclosing on homes. Instead of simply foreclosing on delinquent customers, Litton Loans directs them to structured counseling and support services, trying to help them cure their own credit problems rather than falling further into default.
They state as one of their primary goals that they want to enable families to maintain homeownership. Once limited to Texas homeowners, Litton loans are made throughout the United States today.
High Rate of Complaints for Litton Loans
If you do a search for Litton Loans online, youll find a much higher than usual rate of complaints. This is likely due to two primary issues. First, Litton Loans is more likely than other more traditional loan companies to start collections proceedings early. Litton is well aware that most of their mortgage customers are going to have problems paying, and may not have the best bill-paying habits. For this reason, they try to catch problems with repaying mortgage issues early. Unfortunately, this also has the unintended consequence of making mortgage customers angry.
Second, Litton Loans does have more problematic customers than other mortgage companies. Its customers are more likely to complain when they feel as if theyre being treated unfairly. If you read through the online complaints, youll find one common issue: complaints that Litton dares to start collections calls early in the default process. A point made by those who defend Litton Loans is that if these people just upheld their end of the loan bargain and paid their debts on time, they would not have to fend off these calls.
This is not to say that the complaints are illegitimate; they probably at least sometimes are based in good reasons. But more than with other loan companies, you must take Litton Loan complaints with a grain or two of salt.
Add Your Comments
|Ann Holden1 (11/9/2006)|
|Where did you get your research material for this article?But more than with other loan companies, you must take Litton Loan complaints with a grain or two of salt.This article is NOT accurate.Readers MUST do research on this entity, (Litton Loan Servicing) to see that someone put this PR article online for Litton.AGAIN...THIS ARTICLE IS NOT ACCURATE.|
|Marilyn Howard2 (3/19/2007)|
|Mrs. Holdens statement is correct. I had payed Litton over $80,000 on a $95,000 equity loan. Litton tryed to steal my home because it would have been more profitable for them to foreclosed on my home because of the large amount of equity already built up. Further, they dont try to help people save their homes. Litton has the most aggressive attorneys represent them who are bent on foreclsoure of homes and also, set up the auctioning off of homes. If a homeowner calls Litton to stop the foreclosure or wants to know what the exact repayment amount would be to stop the foreclosure. Litton will say, Oh you have to speak to our attorneys, we no longer have your file. Then you call their lawyers to stop the foreclosure and they dont answer yor phone call. Any way a debt collector should not be in the business of servicing, selling and/or buying of loans. This is definitely a conflict of interest and could be the reason for the majority of their customers complaints.|
|R. E. DENTON3 (6/13/2007)|
|Litton Loan Servicing Class Action On October 26, 2005, customers of Litton Loan Servicing, LP (“Litton”), filed a class action complaint charging the company with unlawful and deceptive business practices in its “servicing” of residential mortgage loans nationwide. Litton services more than 270,000 single-family residential loans of approximately $33 billion in value. The suit was filed in Federal court in Los Angeles, California. Lieff Cabraser Heimann & Bernstein, LLP, and co-counsel, represent the plaintiffs. Summary of Allegations Against Litton The complaint alleges that Litton has engaged in a scheme by which it fails to accurately service its borrowers’ loans, including misapplying or failing to apply payments made. Litton refuses to correct these mistakes and uses the borrowers’ alleged default as a basis for charging the borrowers late fees and other unwarranted fees, and for threatening or attempting foreclosure. Litton also charges unwarranted fees for hazard insurance on property that is properly insured. The components of this alleged scheme include the uniform and common tactics of : misapplying or failing to credit payments received in a timely fashion; charging unwarranted fees; failing to provide customers with timely or clear information about the timing and amount of payments owed; prematurely referring accounts to collections and threatening or attempting foreclosure, regardless of legal and/or contractual grace periods; and charging customers premiums for hazard insurance on property that is already insured. |
|Robert Bogart4 (1/26/2008)|
|Interesting. This answers a lot of questions.I offered more than the asking price on a short sale property - foreclosed by Litton. No response for 2 months.Why do they sit on this property?It is uncanny.Now I see the stratagy.Take the property and sell it to thier friends.Possibly with a government subsidy.Pretty scary.Worst nightmare.|
|lisa gaines5 (9/20/2008)|
|my previous morgage company folded, litton brought most accounts. my august payment was tot be my DOWN PAYMENT and i also had to pay an additional august payment, which was 2,500.00x2..yah! 5,000.00 in august nowe i am behind on sept. and they are talking foreclosure.|
|mary vines6 (11/14/2008)|
|I just finished watching the house committe question Mr LItton who protrayed himself as the crusader for all people in foreclouser. I want the commitee to ask Mr Litton what his loan services record for foreclouser on property owners who have their life saving invested in with more than s50% equity in verses the upside down ones. They were not interestd in helping me save my home from foreclouser even though i begged them to delay untill my home could have time to be sold and i could save some of my $250, equity oh no they wanted my home as soon as possible|
|Jean G7 (11/25/2008)|
|I have dealt with Litton as a Realtor and have found they dont like to pay the Realtors & Brokers their commissions. Just because the listing agent and the buyers agent work in the same office they only want to pay 3%. Had the listing agent know she would have never gotten the listing now one of us has to work for free just to make it happen for our clients. Shame on you Litton.|