Making payments on your mortgage (without a monthly statement) can be harmful to your financial health!

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The below question was asked of Mortgage Professor Jack Guttentag and addressed in his column "Ask the Mortgage Professor"

"I noticed an on-line petition to require all mortgage lenders to provide borrowers with monthly statements of their account. Is this a good cause?"

His response..."Yes, because borrowers don't choose the firm that services their mortgage, they can't fire the firm for cause, and their existing legal protections are weak.
A law requiring servicers to provide monthly statements that update the account and explain all changes in it, will not eliminate servicing abuses, but it will help borrowers who are alert protect themselves..."
Jack M. Guttentag is Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania, and founder of GHR Systems, Inc., a mortgage technology company. See entire article

Professor Guttentag's site is

I am very glad to see that Professor Guttantag appears to agree and understand why there is a need for borrowers to receive monthly statements for tracking their mortgage payments.

How many foreclosures could have been avoided if borrowers had the opportunity to follow their mortgage payments with the aid of a simple mortgage statement? See

It's important to note that most victims of mortgage servicing fraud have an obvious common denominator....their mortgage company didn't provide monthly statements allowing them the right to verify and track how their payments were applied, or if they were accounted for at all. Trusting -without concern that your payments are applied free of errors or fraud is leaving you vulnerable to problems you may not have considered. If you blindly trust your loan payments are applied accurately, and your loan is safe from errors or fraud you might want to re-think that stance. When your mortgage reflects an inaccurate payment history due to misapplied funds or fraud, a chain reaction of other harmful events begin to take on a life of their own.

Without the ability to track loan payments, payments made on time can be erroneously applied as late and you are none the wiser. When interest on late payments and bogus late fees are accrued, then applied, the life of the loan is extended and credit ratings are destroyed. When interest rates jump due to inaccurately reported data, those once affordable credit card payments (and insurance premiums) become unmanageable. And what started as a small problem soon mushrooms beyond control.

You may find these scenarios difficult to believe, so did I. Until, that is, making additional principal payments on my own mortgage without the aid of a monthly statement became the spark that started my epic battle(s) that consumed my life for more than a decade. It's crystal clear to me that if I had received monthly statements, everything that transpired over that decade, would have been avoided. All of it!

After testifying before the Massachusetts Banking Committee in 1995 on the need for monthly statements, Legislators there were stunned at the picture I painted them depicting what was happening to borrowers when they couldn't track their mortgage payments. Many commented "hmmm, I pay extra principal payments too, and I don't receive a statement!..." It was their concern and attention to the facts that led banks there to begin voluntarily offering borrowers monthly statements.

Jumping ahead to 2007, there is still no mandate requiring lenders to provide borrowers monthly statements. Soon after moving to Florida I was disheartened to find my new mortgage came with a brand new coupon payment book rather than a monthly statement. And just as predicted, it wasn't long before similar problems began to creep into my loan once again.

If a practical and common-sense measure, such as a monthly statement can assist borrowers and lenders in detecting errors and deterring fraud why must it take an Act of Congress to get them? If borrowers received monthly statements as they receive from credit card and utility companies any misapplied or "missing" payments could be found early enough to be rectified.

Obviously, the longer problems go undetected, the longer it takes to untangle the mess if and when they are discovered. It's a sad-but-true tale but many borrowers have confirmed that had they known their loans were being mishandled, they wouldn't have lost their homes.

For a more in-depth view see

Also -a must see. story...East Bay Express News: Stolen Property?"

...For Dillon, the case has been an exercise in self-education. "This is all stuff that as a homeowner I shouldn't need to know. I shouldn't need to know what the Pooling and Servicing Agreement is," he says, referring to the lengthy pact between a mortgage company and its servicer. "I should just be able to make my monthly statements and to have them recorded properly every month, and not have to deal with this..." READ MORE

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A memoir exposing the steep price consumers pay when facing mortgage servicing errors, inaccurate credit reporting, illegal debt collection practices, identity theft and weak consumer protection laws. THE BOOK » DENISE'S STORY »