Resources for Dealing With Mortgage Servicers
A list of resources to help homeowners in the midst of mortgage hell.
Having trouble with your mortgage servicer? Fear not, homeowner: There are a number of steps you can take when locking horns with the company that oversees the day-to-day management of your home loan. Step No. 1 is always to contact your servicer directly and try to negotiate a solution. Customer service contact information is usually included on invoices and correspondence from the company. You can also find contact information for major mortgage companies here.
However, homeowners often complain that they're unable to reach a live person at their servicer or that company employees pass them off until they wind up leaving voice mail messages in the void. Others find that every time they call they deal with a different person who doesn't know the history of their case. If you're facing any of these scenarios, you still have options.
You can call the HOPE NOW hotline (888-996-HOPE) or visit HOPE NOW's website, which offers information on locating free housing counselors to help mediate with your mortgage servicers. The organization's website also includes information on events throughout the country that can help struggling homeowners, and a wealth of resources on the federal Making Home Affordable program, unemployment benefit estimations, and state foreclosure rules.
If that doesn't work, you can file what's called a "qualified written request" letter, an official complaint under the guidelines of the Real Estate Settlement Procedures Act (RESPA). Here's an example of how to write one of these letters, as specified by the Department of Housing and Urban Development, which oversees RESPA and its servicing statutes. Under RESPA, servicers have to respond to a complaint within 20 business days and try to resolve the problem within 60 business days.
Finally, you can go the legal route and file a civil lawsuit against your mortgage servicer. The National Association of Consumer Advocates has a searchable database of attorneys who litigate housing cases.
And for general background knowledge that can help you deal with servicers, here's some recommended reading:
- "Why Servicers Foreclose When They Should Modify and Other Puzzles of Servicer Behavior," National Consumer Law Center (PDF)
- "Mortgage Servicing: Making Sure Your Payments Count," Federal Trade Commission
- "The Foreclosure Rescue Mirage," Mother Jones
- "Why Is Mortgage Servicing So Bad?"; "Is There Recourse Against Bad Mortgage Servicing?"; "Are These Mortgage Late Fees Kosher?"; "Escrow Abuse and Manufactured Foreclosures"; and "Your Mortgage Records Can Save Your Home Equity," by Jack Guttentag, professor of finance emeritus at the University of Pennsylvania's Wharton School, MtgProfessor.com
Comments
ESOP Counselors Take Servicers to Task
Andy:
One thing you left off your list of ways to deal with uncooperative servicers is foreclosure prevention counselors like the ones at my organization, Empowering & Strengthening Ohio's People (ESOP). We're known for negotiating agreements with servicers and lenders (through community organizing efforts). These agreements enable us to bring more effective and timely loan modifications to homeowners. In lieu of an agreement, we continue to organize and hold servicers and lenders accountable to struggling homeowners. As a result, we have an 83 percent success rate in obtaining affordable, sustainable loan workouts.
If you'd like more information, please contact ESOP (or me) at 216-361-0718.
Thanks,
Charu
Great!!
Andy,
Great article. I will be linking to it for my blog. Some other things you didn't mention; contact your local Non profit organization such as the Neighborhood Housing Services of America. Also, people need to know where to go when all this fails. File a complaint with the FTC.gov consumer protection division of the government.
Tammy B
another resource and data
Another resource for homeowners in trouble is the website www.findaforeclosurecounselor.org. This website lists all of the counseling organizations that are, in part, financed by the National Foreclosure Mitigation Counseling program administered by NeighborWorks America. Just enter the zip code, press enter and up comes a list of nonprofit organizations in the homeowner's area.
Second, it is worth pointing out that research by NeighborWorks America shows that a homeowners who do work with a foreclosure prevention counselor receive mortgage modifications that are on average $454 lower than homeowners who work with their servicers all alone. That's a monthly payment $454 less and savings over a year that exceeds $5,000.
Finally, a homeowner in foreclosure who works with a counselor is 60 percent more likely to not lose the home to foreclosure than a homeowner who works alone with the servicer.
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