Dispute with Mortgage Company

Mortgage servicers might make major mistakes when administering a homeowner’s mortgage loan account. If you suspect your mortgage servicer has made a mistake, federal law allows you to demand that the lender remedy the error or furnish you with specified information.

Mortgage servicers are responsible for managing mortgage loan accounts. Typically, the servicer is responsible for:

• giving borrowers mortgage statements
• mortgage payments collection and processing
• maintaining a record of account balances
• escrow account management
• examining mortgage modification petitions and other options for preventing foreclosure, and
• managing foreclosures

The bank that owns your loan or a different organization could be your mortgage servicer.

The Real Estate Settlement Procedures Act (RESPA) is federal legislation that allows you to dispute errors with your mortgage servicer and get particular account information. Sending a letter to your servicer is one approach to accomplish this.

Your letter will be treated as a “notice of error” or a “request for information” under recent RESPA revisions. Depending on the request you send, the servicer has varied time constraints for responding to your letter.

If you write to advise the servicer of a specific error it made while administering your loan; the servicer must remedy the issue, notify you of the correction, and provide contact information for you to follow up – or let you know that no error occurred and explain why.

If you write to advise the servicer of a specific error it made while administering your loan; the servicer must remedy the issue, notify you of the correction, and provide contact information for you to follow up – or let you know that no error occurred and explain why.

• refusing to accept compliant payments
• applying or crediting payments incorrectly
• levying excessive fees or charges
• not paying your taxes or insurance
• failure to give appropriate information on workout and foreclosure possibilities

Your servicer must acknowledge a written notice asserting a specific error within five business days. The amount of time the servicer has to respond to your notice of error is determined by the sort of error you allege the servicer made.

If you allege that the servicer failed to give you an accurate payback statement after requesting one, the servicer must answer within seven business days of receiving your letter. Suppose you argue that the servicer started the foreclosure process incorrectly or improperly planned or conducted the foreclosure sale. In that case, it must respond before the foreclosure sale date or within 30 days of receiving your letter (whichever is earlier).

If you claim a different type of problem, the servicer has 30 days to reply after receiving your notice.

The servicer may normally extend the 30-day term by 15 days if it informs you of the extension and the reason for the delay within the 30 days. (However, if your notice of error is about a payback statement or certain foreclosure issues, a 15-day extension is not allowed.)

The servicer is not required to respond to your notification of error or information request if:

• Your letter concerns a mistake that is nearly identical to the one you previously claimed (and the servicer has already responded to it)
• Your letter wants the same information as a previous request (and the servicer already responded to your request)
• your request is too general, or
• You’re inquiring about a loan that was moved to a new servicer (or paid off) over a year ago.

Even if your notice meets one of the four conditions listed above, the servicer cannot just disregard it. It must notify you within five business days if it determines that it does not have to deal with your notification or request and must explain why.

Always make sure to follow up and document all communication and correspondence if an error leads to penalties or the start of a foreclosure action. An attorney can use this crucial material in contesting any foreclosure action brought about by the error.

What Happens If My Lender Commits Mortgage Fraud?

Lender fraud was one of the factors that contributed to the 2008 subprime mortgage crisis. When foreclosures became common, many mortgage lenders could not furnish the loan documentation required to foreclose. To proceed with foreclosure, lenders frequently fabricated new, falsified paperwork.

The fake documents were frequently prepared haphazardly, with misspellings, inaccurate names and dates, and other obvious mistakes. As a result, many judges began to modify the standards, allowing mortgage fraud to be considered a foreclosure defense.

New rules have increased the trustworthiness of the loan process in the United States, although any transaction carries the danger of fraud. The best approach to a home loan application is, to tell the truth. If a person suspects that they have been the victim of lender fraud, they should contact a real estate attorney as soon as feasible.

Complain to the Consumer Financial Protection Bureau (CFPB).

The Consumer Financial Protection Bureau’s website has a sample notice of error and request for information letter and important information regarding what to include in the letter.

You can also contact the Consumer Financial Protection Bureau online or by calling 855-411-2372 to make a complaint about the servicer. The bureau will forward your complaint, together with any supporting documentation, to the servicer and seek to acquire a response from them within 15 days.

Consult a Lawyer

Consider consulting a lawyer if the servicer fails to reply to your call, notice of error, or complaint, or denies that it made an error. An attorney can assist you in making decisions about your circumstances and enforce your rights.

Are you about to lose your house, hire a foreclosure attorney right now. It’s unlikely that calling the servicer, submitting a notice of error, or filing a complaint with the Consumer Financial Protection Bureau will stop the foreclosure. You’ll almost certainly need legal help to stop a foreclosure. A debt relief lawyer, real estate lawyer, or consumer protection lawyer may be able to assist you if you are not at urgent risk of foreclosure.

If you’re having difficulties making your mortgage payments or are facing foreclosure, you should speak with a HUD-approved housing counselor.