Written By: Alan S. Wolf
Mortgage servicers know that it’s probably a bad day when they arrive at their office to find reporters from 60 Minutes waiting in their lobby to speak to them regarding some mortgage servicing problem. 60 Minutes, a CBS syndicated news program, has a reputation for featuring liberal causes. Its 20-minute segments on various issues reach millions of households each week, and despite exposing problems in often a very one-sided manner, its segments almost invariably have a great influence on public opinion. That influence is further enhanced by the news media, which often pick up on the 60 Minutes segments and add their own investigations and twists. In short, a 60 Minutes segment has tremendous influence, even beyond the initial broadcast.
What’s Out There Can Hurt You
Those being investigated by 60 Minutes understand this power and know that they must act carefully to survive the assault. Accordingly, when 60 Minutes calls, companies respond. Top executives, public relations firms, and a battery of attorneys all join in a coordinated effort to mitigate the attack. In some cases, it is truly a fight for survival. While the power of 60 Minutes is awesome, it pales in comparison to the power of the Internet. That bears repeating: The power of60 Minutes pales in comparison to the power of the Internet.
Every day on the Internet, mortgage servicers are attacked by individuals whose reach and influence now exceed that of 60 Minutes. And while 60 Minutes is subject to the rules of journalism, where at least the matters presented are first reviewed and edited, the Internet has no such controls. Yet, despite this immense threat, mortgage servicers have essentially ignored attacks launched from the Internet. They do not call in their top executives, public relations firms, or legal counsel to tackle the problem. Instead, they largely do nothing. This is in part because while mortgage servicers regularly use the Internet, they do not understand the power of the Internet as employed by the groups that regularly attack the industry. It’s time to change that.
If you think about it, the Internet, by its very nature, is in many ways an ideal arena for activity by those dedicated to attacking the mortgage industry. Most notably, it offers:
▪ ease of access
▪ rapid flow of information
▪ little or no censorship, regulation, or other form of governmental control
▪ anonymity of communication
▪ inexpensive development and maintenance of a Web presence
▪ the ability to influence coverage in the traditional mass media, which increasingly use the Internet as a source for stories
When you add to this foundation the growth of the Internet, these factors alone become alarming. In 1995, there were merely 16 million people on the Internet. In 2000, that number had reached 500 million worldwide. Today, there are over a billion people using the Internet across the world, and over 75 percent of all Americans (approximately 205 million) have Internet access. And these numbers continue to climb.
Unfavorable Forums
Mortgage servicers are vaguely aware of these factors. You would almost have to be brain-dead not to have used the Internet or know of its tremendous growth. And, obviously, mortgage servicers regularly use the Internet for email and to review industry websites for information. Most mortgage servicers even provide their own websites at which their borrowers can get loan-level information. But beyond these basics, there is a dangerous lack of knowledge. Very few servicers know anything about forums, blogs, or RSS. Yet, all of these Internet tools are regularly, and quite adeptly, used by individuals, and even whole consumer groups, to attack our industry.
The most nefarious Internet tool is the forum. An Internet forum (also known as Web forum, message board, electronic bulletin board, discussion board, discussion forum, or discussion group) is a place on a website where electronic discussions can be held. The discussion is held by a forum member posting a typed comment or question (called a “posting”), which can be viewed by other members. Those members can then reply, and those replies, in turn, can be viewed, and additional responses can be made. The initial question and the subsequent responses are organized on the webpage so that each posting is shown immediately after the prior posting in chronological order. This is known as a “thread.” By reading the thread, the member can determine the thoughts of the members on the topic and add his or her own comments. These threads generally remain saved on the forum website for future reading indefinitely.
Know Your Foes
Internet forums create a sense of community to discuss any variety of topics: a hobby, an illness, a political thought. Unfortunately, individuals and consumer groups angry at the mortgage servicing industry have started their own forums where borrowers create a community to regularly discuss the purported misdeeds of our industry. Like a snowball rolling downhill, the claims in these forums become enhanced and build to such a size that soon class action attorneys take notice, and litigation begins.
There are literally hundreds of such forums directed at attacking our industry. And forums sometimes disappear, only to be reincarnated on some other site. Currently, the three leading forums attacking our industry are www.msfraud.org(mortgage servicing fraud), www.ripoffreport.com and www.scam.com/forumdisplay.php?f=30. Each has it own approach.
The mortgage servicing fraud site is narrowly directed at only our industry. A quote from the home page puts its approach into perspective: “The American Dream of homeownership is being turned into a NIGHTMARE! This nightmare is orchestrated by a growing number of well-known, corrupt, and ruthless mortgage servicers who manufacture defaults on performing loans to then flood the account with illegal fees strategically designed to STEAL the borrower’s equity — and ultimately the property. In addition, the borrower’s credit is destroyed to prevent them from refinancing with another lender.”
There are a number of adverse articles on the site and other informational resources that negatively reflect on our industry, but the guts of the site is its forum (http://www.msfraud.org/forum.htm). Here, every imaginable problem is discussed; every adverse case is referenced; and like sharks that smell blood, class action attorneys tout their successes and seek new clients. This site alone should keep everyone in the industry up late at night. Nonetheless, it is a must-read to gain insight into just how serious this problem has become.
Troubling Blogs
Following close on the heels of forums is the relatively new Internet tool known as a blog. A blog is a website, most often authored by one person, who picks the topics or posts for the blog in the form of his or her own personal opinion. Others can then link to that person’s posts or comment right there on the blog.
Blogs differ from forums in subtle ways. A blog is, first and foremost, a publishing tool; a means to provide a voice to the individual blogger’s single point of view. Because blogs often include the ability for readers to comment on blog posts, they are somewhat like forums; however, the interaction is limited to responding to the blog post. Unlike forums, new discussions cannot be created.
Blogs cover a plethora of topics. It is estimated that there are nearly 50 million blogs currently in existence with more being added every day. Unfortunately, some of those blogs are set up to attack our industry. Two such examples arehttp://www.mymortgagedisaster.com/ and http://www.mortgageabuse.com/archives/cat-mortgage-servicing.html. These sites exist because they have developed a following, and all influence public opinion.
To make matters even worse, most blogs are syndicated through the use of an Internet tool called RSS (Really Simple Syndication). RSS is a way for websites to send their articles to news bureaus and anyone else who subscribes to this free service. Accordingly, it lets Web users freely subscribe to their choice of content sources across the Internet. Aggregation tools (e.g., personalized start pages, RSS readers) display summaries of these subscriptions, which update automatically when new information is available. RSS reduces the need for users to visit many individual websites and provides the user with near instantaneous information. The traditional news media often subscribe to RSS feeds to keep on top of various subjects, including the claims of those who would attack our industry.
Case in Point
On September 8, 2004, CBS News’ 60 Minutes aired a segment entitled “For the Record” concerning President Bush’s Texas Air National Guard service. The segment referred to certain documents that were adverse to President Bush’s claims, and 60 Minutes reported that it had “consulted with a handwriting analyst and document expert who believes the material is authentic.” Within minutes after the segment aired, questions about the authenticity of the documents were raised on numerous Internet blogs. Since these blogs were syndicated through RSS, the traditional media were immediately tipped off, creating a firestorm in print, on the air, and on the Internet about the documents’ authenticity. 60 Minutes was forced to retract its statements, and Dan Rather, the prominent news anchor who reported the story, apologized and later resigned. That same power is now being directed against the mortgage servicing industry.
The Internet is a potent force. Mortgage servicers need to play catch-up and educate themselves on the Internet tools used by those who seek to unfairly attack our industry, and they need to develop methods and procedures to mitigate the harm.