Mortgage Loan Accounting Errors

Mortgage lender errors might mean the difference between keeping the property and losing it to foreclosure. Accounting errors are time-consuming and difficult to correct. Even when the borrower points out errors, most lenders do not take the effort to remedy them. If you suspect your mortgage lender or servicer of accounting fraud or malpractice, you should seek legal help. Correcting accounting inaccuracies is frequently necessary to ensure that a lender does not record delinquencies and harm borrowers’ credit.

When a loan is transferred from one lender or servicer to another, some of the most common accounting problems occur. The new servicer frequently lacks reliable and up-to-date payment data. A new servicer may foreclose on a property due to poor bookkeeping. Mistakes are typical when a borrower makes payments for a trial modification or ceases paying payments during a forbearance agreement. After a borrower has started making payments for a loan modification, frequent inaccuracies affect the trial balance. Our legal team will work with you to figure out how to use the law to address and resolve these concerns.

A lender has a responsibility to disclose information that affects the borrower. Payment record accounting inaccuracies and revisions can harm a borrower’s credit score. For financial statement problems, billing fraud, wrongful repossession, and billing disparities, Consumer Action Law Group initiates legal action against lenders. We have a proven track record of filing cases to assist consumers in correcting lender errors.

Correction of financial statement inaccuracies is a time-consuming process. Many lenders make errors that are detrimental to the borrower. Our lawyers frequently sue lenders for losses caused by accounting irregularities. Our lawyers will provide a free case evaluation and discuss your alternatives for filing a lawsuit or sending a demand letter for immediate correction.

Our lawyers will look into the payment history and pursue legal action to prove that the inaccuracies caused harm. We seek restitution and other monetary damages based on the true costs of accounting errors.

How to Handle Mortgage Servicer Mistakes

Here’s how to get your servicer to fix a mistake or provide critical information.

Mortgage servicers might make major mistakes when administering a homeowner’s loan account. Fortunately, the Real Estate Settlement Procedures Act (RESPA) provides a mechanism for you to demand that the servicer remedy any errors it made in managing your mortgage payments. This law also offers you the ability to obtain specific account information. You’ll need to write a letter to your servicer if you wish to report an error or request information about your account.

Your letter will be treated as a “notice of error” or a “request for information” under changes to Regulation X, which implements RESPA. Depending on the type of request you send, different time constraints exist for the servicer to react to your letter.

Notification of Error

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 to follow up on, or let you know that no error occurred and explain why.

There’s a lot of space for error when it comes to loan servicing because there are so many distinct responsibilities and variables. The following servicer errors are covered by the legislation and can be remedied in a notice of error:

• refusing to accept compliant payments
• applying or crediting payments incorrectly
• levying excessive fees or charges
• paying property taxes or homeowners’ insurance late
• failing to provide correct and timely information to a transferee servicer on the servicing of a borrower’s mortgage loan account
• on a borrower’s request, not providing an actual payback balance amount
• providing inaccurate information about loss mitigation strategies and foreclosures
• Infringing on federal mortgage servicing regulations by unlawfully initiating a foreclosure, dual tracking, or performing a foreclosure sale, or
• any other inaccuracy connected to a borrower’s mortgage loan servicing

1. Acceptance of an Error Notice Deadline

   The servicer must acknowledge a written notice asserting a specific error within five business days.

2. Response to an Error Notice Deadline

   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 handled the foreclosure sale. In that case, the servicer must answer before the foreclosure sale date or within 30 business days of receiving your letter, whichever comes first.
   • 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. A 15-day extension is not permitted if your notification of error concerns a payment statement or certain foreclosure-related problems.

Send Your Letter to the Right Place

Make sure to send your notice of error or information request to the servicer’s designated mailing address for this purpose. You can usually find information on where to send your letter on your loan servicer’s website, or you may call the servicer and ask for the address.

Informational Requests

If you’re unsure whether the servicer committed an error and want more information about your account to assist you in deciding, you can submit a request for information. For example, you might want to review the servicer’s payment history records.

1. Acceptance of a Request for Information Deadline

   If you submit a written request for information, the servicer must respond within five days.

2. Response to a Request for Information Deadline

   In most cases, the servicer must supply you with the information you requested within 30 business days or explain why it is not accessible and the name and contact information of someone with whom you can follow up.