Mortgage Servicing and Foreclosure Issues

Your home is often the most expensive purchase you will make in your lifetime and the majority of people carry a mortgage as part of their home ownership.  A mortgage servicer is the person responsible for managing your mortgage on a day-to-day basis.  In many situations, your mortgage servicer will be different from the financial institution that actually owns your loan. The mortgage servicer is responsible for collecting and applying your payment, managing your escrow account, and paying your property taxes and homeowner’s insurance, if applicable.  The servicer is who you normally contact with any questions regarding your mortgage.

A mortgage servicer is required to do the following with regards to your mortgage:

• Make property tax and homeowner insurance payments on time.
• Within 45 days of establishing the escrow account (for new mortgages), the servicer must provide you with a statement outlining estimated taxes, insurance premiums and other escrow items, to be spent over the next 12 months.
• Provide an annual statement of your escrow account, at no cost to you, showing the account balance and payments made for taxes, homeowners insurance and other escrow payments.
• If your loan is transferred to another servicer, the current servicer must notify you at least 15 days prior to the date of the effective date of the transfer. The effective date is when the first mortgage payment is due at the new servicer’s address.   It is important to note that the new servicer cannot change the terms of the original contract.
• Must credit a payment to your loan account as of the day it is received.
• Provide you with a payoff statement, upon request.

If your loan is in default, mortgage servicers may also order what is known as default-related services to protect the value of the property.  These services may include:

• Property inspections – to make sure the property is not abandoned and is being maintained.
• Property preservation services such as lawn mowing, landscaping and general repair.

These services can be costly and will be added to your loan.  In addition, if your servicer  starts foreclosure proceedings on your property, additional costs such as attorney fees, title fees and other charges will be added to your loan account, making it more difficult to bring your loan current and avoid a foreclosure on your home.

If you are having issues with your mortgage servicer or concerned that you may lose your home to foreclosure, contact us today for a free consultation.  Our attorneys have many years of experience assisting clients with mortgage servicer issues and preventing foreclosure. We will review the options that are available to you for relief.

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