The 5 biggest mortgage servicing traps

You may think your mortgage lender holds your loan for the life of the loan. However, in today's market, mortgage servicing companies often buy the rights to service mortgages, which means a company other than your lender is basically collecting and recording your monthly loan payments. If you don't know who's servicing your mortgage, you probably also don't know what your rights are, which puts you at risk for mortgage servicing scams.

Take EMC Mortgage Corp., a mortgage servicing company operated by JP Morgan Chase, which late last year was ordered by the FTC to pay $28 million to settle charges related to unlawful practices in servicing consumer home mortgages. Some of these EMC consumers had their credit reports ruined or were charged unlawful fees -- others even had their homes mistakenly foreclosed on, although they had the money to pay.