I have a new mortgage servicer and my experience has been nothing but an annoying nightmare. Perhaps this is a good time to review what the federal government says about mortgage servicers. A key point is professionalism and no surprises.
When mortgage servicers make mistakes, records get lost, payments are processed too slowly, or servicer personnel do not have the latest information about a consumer’s account, the consumer suffers the consequences. The CFPB’s rules will require common-sense policies and procedures for handling consumer accounts and preventing runarounds. These rules include:
- Payments Promptly Credited: Servicers must credit a consumer’s account the date a payment is received. If the servicer places partial payments in a “suspense account,” once the amount in such an account equals a full payment, the servicer must credit it to the borrower’s account.
- Prompt Response to Requests for Payoff Balances: Servicers must generally provide a response to consumer requests for the payoff balances of their mortgage loans within seven business days of receiving a written request.
- Errors Corrected and Information Provided Quickly: Servicers must generally acknowledge receipt of written notices from consumers regarding certain errors or requesting information about their mortgage loans. Generally, within 30 days, the servicer must: correct the error and provide the information requested; conduct a reasonable investigation and inform the borrower why the error did not occur; or inform the borrower that the information requested is unavailable.
- Maintain Accurate and Accessible Documents and Information: Servicers must store borrower information in a way that allows it to be easily accessible. Servicers must also have policies and procedures in place to ensure that they can provide timely and accurate information to borrowers, investors, and in any foreclosure proceeding, the courts.
All of these rules and many more have one clear cut assumption — That the servicer communicate with the home owner. If you read my previous articles about Loancare Mortgage Servicing, a Servicelink company, you know that Loancare calls homeowners but blocks the Loancare caller ID. I know my Verizon service tells Loancare that their call cannot be received due to withheld or restricted caller ID. Loancare doesn’t leave a message, and I cannot see the callers telephone number. Who does business like that?
This is a direct quote from ConsumerFinance.gov:
New federal mortgage servicing rules require servicers to correct errors related to the servicing of mortgage loans. If you think your servicer has made an error, you can:
Call your servicer. They may be able to help you over the phone.
Write a letter
If your servicer was unable to resolve your issue over the phone, you may have additional protections if you write your servicer a letter.
Include your name, home address, and mortgage account number. Use the name that is on your mortgage and include your spouse or other co-borrower if they are on the mortgage.
Identify the error
Tell your servicer exactly what error you believe occurred.
Give important details: “I made my January payment on time. I paid $1,500 on January 1 but was still charged a late fee.
Rather than writing “you did not apply my payment correctly,” explain how you believe the payment was incorrectly applied.
Do not write your letter on your payment coupon or other payment form you get from your servicer.
Send the letter to the proper address. A servicer may use a special address for borrowers sending requests to correct errors.
You can also call your servicer and ask for the proper address. Note that the proper address for error correction may be different from the address where you send your monthly payment.
What to expect:
If you follow these instructions, the servicer must acknowledge receipt of your request and either
Correct the error and confirm that the error was corrected, or Investigate and determine that no error occurred, and send you a notice explaining why.
Your servicer might ask you for more information about the error, but your servicer can’t refuse to investigate or determine that no error occurred because you didn’t provide the information.
A servicer does not have to investigate your request for error resolution if the request is overly broad, or you are sending in the same request repeatedly.
At this point in my communications with Loancare LLC I worried about sending the same request too many times. However, Loancare continually stated that they did not get the documents that I sent, thus obviously they could not use the defense that the same request was sent over and over. I simply said “Oh, you don’t have them? Let me send them again” – six or eight different times.
Application of funds when you make your mortgage payment should be straightforward. Principle and interest plus escrow. Loancare decided to send me an escrow refund, yet they continue to state that my mortgage is more than 30 days late. I attempted to log on and redeposit the funds to escrow but I was told I do not have that option because my account is more than 30 days late.
Loancare sent me a letter stating that my new monthly payment, effective February 1, 2017, would be a mere $303. That is totally incorrect. Loancare can pay my taxes, but forgot about my property insurance. Upon receipt of the letter from Loancare I knew they had made another error in a long list of errors by Loancare.
Two days later I received another letter, the intent of which was to correct the mistakes from the previous letter. For the first time since Loancare began servicing my mortgage the monthly payment was estimated correctly. I kept telling Loancare that my payment should be that amount. How were my two previous payments applied? The payments were for more than the new Loancare estimate, but not as much as the initial Loancare amount.
I will update this ongoing saga as I learn more. As a final note, Loancare told me that Loancare doesn’t have an office of legal counsel. I wrote to their corporate attorney anyway, in care of Servicelink. Loancare LLC is a Servicelink company.