Your mortgage servicer is not perfect, and sometimes they make mistakes just like everyone else. It is important to review all of your documents and communications with your servicer to check for mistakes. If something doesn't look right, it may not be. You should alert your mortgage servicer immediately if you think your account may be reporting incorrectly. Here are some of the common mortgage servicer mistakes to look out for:
- misapplied mortgage payments
- overcharging the buyer
- mistakenly force placing insurance
- improperly initiating a foreclosure
- dual tracking
- improper loan modifications
- failure to pay taxes and insurance from the escrow account
If you think your mortgage may be subject to any of these mistakes, you can call your mortgage servicer or even send them a letter. This is known as a "notice of error." Once the servicer has received a notice of error they must respond within a certain amount of business days depending on the type of mistake. If you catch your mortgage servicer in a mistake, you have 3 years to bring a lawsuit against them if they are not responding to your requests.
(Read more about statutes of limitations.)
Your servicer does not always have to help you with every request you send. If you send them a notice requesting information that they have previously given you, they are not required to assist you. If your letter is overly broad the lender is not required to respond. If you request information from the servicer but your mortgage has been transferred to a different servicer, your previous servicer is not required to help you. When your servicer is not required to respond to your request, they still have to notify you. They cannot just leave you hanging and not respond to you when you reach out to them.
Homeowners are protected by the Real Estate Settlement Procedures Act (RESPA). This act was created to put an end to abusive practices by mortgage servicers and lenders. Before RESPA, companies were awarding unfair kickbacks and over using escrow accounts. RESPA requires mortgage servicers to make full disclosures to their clients detailing how they will handle your mortgage and what laws protect you. The act also prohibits mortgage servicers from requiring unreasonably large escrow account from borrowers.
If your lender or servicer does not reply to your request, or you need help understanding their responses, hire an experienced foreclosure defense attorney. They will be able to investigate the problem for you, and explain your options. Whatever the problem is that you are having with your mortgage servicer, if you can afford to make your mortgage payments, you should always continue to do so.