what happens when the Mortgage Company’s Records are Wrong
While most of our negotiations with lenders start with the proposition that the Lender has done nothing wrong and the Borrower has simply been unable to keep up with payments, there are a few loan work-outs that we handle when the Lender has made an error and those errors often compound to disaster. For example, the Homeowner may obtain hazard insurance and their insurance agent may send proof of coverage to the wrong address. It is not unusual for the Lender to simply place their own insurance coverage on the Borrower’s home with little warning. All too often, that Lender placed coverage is more than twice as expensive as the Homeowner’s own coverage and often duplicates what the Homeowner has already paid for!!! This is just one of several miscommunications that can take on a life of their own. After the initial error, the Lender often attributes the Borrower with failing to pay the full mortgage payment because the Borrower thought they remedied a problem, e.g., lack of insurance, by buying a new new policy. The alleged “failure to pay what is owed” can be compounded with late charges, legal fees, or worse yet, REJECTED MONTHLY PAYMENTS! If this happens, the situation is almost always more critical than the Homeowner realizes and foreclosure can be just weeks away. Many Homeowners courageously battle this sort of unfair incompetence with phone call after phone call but they also neglect to document in writing what is told to them. The answer is often another confusing written notice from the Lender with no acknowledgement of the phone calls and results of previous discussions. The Lender maintains the upper hand by always communicating in writing!
Now that there is a new Consumer Protection Agency designed to help Borrowers in this position, the government is attempting to give Lenders more objective guidelines and requirements to meet before they can begin compounding charge upon new charge on the Borrower’s account.
This new regulation and the many other anemic attempts from Washington to level the playing field between the Lender and the Borrower will help, but only so much. It may become necessary that you find a real estate attorney and be prepared to litigate to force the Lender to give a fair accounting of all that you have paid and done to comply with your mortgage. Sometimes there is no substitute for hiring an advocate that can go toe to toe with the Lender and document in writing the ongoing negotiations and resolutions of your problem. Ultimately, many Lenders will not stop until the Borrower files an Injunction in court! Sometimes, it takes a legislator or other government official or bank regulator to slow down their race to foreclose. Whatever it takes, if you have been wrongfully accused of defaulting on your mortgage, don’t give up! Get help, hand over the boxing gloves, and keep the fight going.