Mortgage Loan Payment Errors

Are you aware that your lender and your servicer are two separate entities? The lender is the institution where you borrow money, usually a bank, credit union, or mortgage firm. You commit to repaying the lender when you take out a mortgage loan by signing a contract.

The servicer is the organization that manages your account daily. The lender is sometimes also the servicer. However, the lender frequently hires another organization to serve as the servicer. It’s critical to know your mortgage servicer because it’s the firm that manages your loan.

If you have an escrow account, it covers your insurance and taxes. You can put money into an escrow account to pay for insurance and taxes. The service is in charge of the account, ensuring that the lender knows that the funds are available to pay the bills when they are due. Check your mortgage statement or coupon payment book for the name of your servicer. Your servicer may vary from time to time. You’ll receive notices from both your old and new services within a few weeks of the switch. The notices include contact information for the new servicer and instructions about how to contact them if you have a question or a complaint.

How to Prevent and Resolve Servicer Issues

  • Payment must usually be credited to your account the same day it is received. You won’t have to pay any additional costs, and the lender won’t think the payment is late. Late payments appear on your credit report and may impact your ability to obtain credit in the future. Default and foreclosure might occur if you make too many late payments.

  • Examine and maintain your records. Read them all when you receive letters, emails, and statements from your mortgage servicer. Make sure their records are identical to yours. Every billing cycle, most servicers (save very tiny ones) must send you either a coupon book (frequently every year) or a statement (often every month). Even if they want to send coupon booklets, servicers must deliver quarterly statements to all borrowers with adjustable-rate mortgages.

  • Your servicer’s contact information will be found in your coupon book or statement. You can discover more about your account, seek an explanation for a charge, or confirm that your payments are being credited correctly and on schedule this way.

  • Call your mortgage provider if your statement is late, even if it’s only a few days late, to see if your account has an issue. You may be in default on your loan if your account shows that you are paying late. Late payments and defaults will be reported to a credit bureau and appear on your credit record. This may impact your capacity to obtain credit in the future. If you don’t understand something, ask for an explanation.

  • Call your mortgage provider if your statement is late, even if it’s only a few days late, to see if your account has an issue. You may be in default on your loan if your account shows that you are paying late. Late payments and defaults will be reported to a credit bureau and appear on your credit record. This may impact your capacity to obtain credit in the future. If you don’t understand something, ask for an explanation.

  • Call your mortgage provider if your statement is late, even if it’s only a few days late, to see if your account has an issue. You may be in default on your loan if your account shows that you are paying late. Late payments and defaults will be reported to a credit bureau and appear on your credit record. This may impact your capacity to obtain credit in the future. If you don’t understand something, ask for an explanation.

  • Check your loan balance and account details. You’ll need to confirm the payoff amount with the servicer if you want to refinance or pay off your loan debt before the end of the loan term. The amount you still owe on your loan is the payback amount. Because the payment amount includes interest accumulated through the day you anticipate paying off the loan and any fees you haven’t yet paid, it differs from your current loan balance. To acquire your payment amount as of a given date, call your servicer.

Looking for Mortgage Analysis Services

Consider the following questions before deciding to pay off your mortgage.

  1. Will you be charged a penalty for paying early? If you pay your loan back early, check your monthly billing statement, coupon book, or the documents you signed at the loan closing (usually in the Note or Addendum) to determine if you’ll be charged a prepayment penalty. A penalty is usually only applied if you pay off the entire debt (most likely when you sell or refinance the home).

  2. Do you have any additional debts? Other loans, credit cards, and vehicle loans may make more sense to pay off first, especially if you’re paying a higher interest rate.

  3. What are your current circumstances? Consider whether paying off the debt early is beneficial to you. Do you intend to make your home your permanent residence? Are you about to retire? Will paying down your mortgage have tax consequences? Is there any advantage to paying the penalty?

Raise and resolve conflicts or mistakes

If the servicer made a mistake or charged you a price you don’t know due, contact the company as soon as possible to have it corrected. Maintain your usual monthly mortgage payment, though. Do not deduct the amount in dispute from your mortgage payment. Some servicers will refuse to accept payments that they consider “partial.” They could either return your check and charge you a late fee or declare that your mortgage is in default and begin foreclosure procedures against you.

Your dispute should not be written on your payment coupon or a copy of your monthly mortgage statement. Instead, write to your servicer and describe the issue (this is known as a “qualified written request”).

Write your request using the Sample Complaint Letter, providing your account number and explaining why you believe your account is inaccurate.

Gather any supporting documentation for your request. Copies of your statements, coupon book, and documents proving payment should be kept in your records (for instance, canceled checks, bank account statements, online account histories, and other letters to the servicer). These documents can be used to prove your payment history and interactions with the servicer.

Send your letter, along with copies of any supporting papers, to the mortgage servicer’s customer service address by certified mail, with a return receipt requested. This might not be the same address where you submit your money.

Keep a copy of your letter and the original materials you sent.

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