Mortgage Servicing & Loan Servicing--Make sure your payments count!
Loan Servicing: Fair Credit Billing Act (FCBA)
The Fair Credit Billing Act applies to "open end" credit accounts, such as credit cards, and revolving charge accounts-such as department store accounts. It does not cover installment contracts-loans or extensions of credit you repay on a fixed schedule. Consumers often buy cars, furniture and major appliances on an installment basis, and repay personal loans in installments as well.
The FCBA establishes procedures for resolving billing errors on your credit card accounts, including fraudulent charges on your accounts. The law also limits your liability for unauthorized credit card charges to $50 per card. To take advantage of the law's consumer protections, you must:
•Write to the creditor at the address given for "billing inquiries," NOT the address for sending your payments. Include your name, address, account number, and a description of the billing error, including the amount and date of the error.
•Send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you. If an identity thief changed the address on your account and you didn't receive the bill, your dispute letter still must reach the creditor within 60 days of when the creditor would have mailed the bill. This is one reason it's essential to keep track of your billing statements, and follow up quickly if your bills don't arrive on time.
•You should send your letter by certified mail, and request a return receipt. It becomes your proof of the date the creditor received the letter. Include copies (NOT originals) of your police report or other documents that support your position. Keep a copy of your dispute letter.
The creditor must acknowledge your complaint in writing within 30 days after receiving it, unless the problem has been resolved. The creditor must resolve the dispute within two billing cycles (but not more than 90 days) after receiving your letter.
A home is usually your biggest asset and biggest debt and that's why it's so important to know who is handling your payments, how they are handling them and how to track your payments to ensure they are applied --and applied accurately
A mortgage servicer is responsible for collecting your monthly loan payments and crediting your account. A servicer also handles your escrow account, if you have one.
The Real Estate Settlement Procedures Act (RESPA), enforced by the Department of Housing and Urban Development, is the major law covering escrow accounts. If your mortgage servicer administers an escrow account for you, the servicer is generally required to make escrow payments for taxes, insurance, and any other charges in a timely manner. Within 45 days of establishing the account, the servicer must give you a statement that clearly itemizes the estimated taxes, insurance premiums, and other anticipated charges to be paid over the next 12 months, and the expected dates and totals of those payments.
Tracking your monthly payments.
Too many loans are often paid without the borrower receiving a monthly statement. Often times we are forced to make payments using payment coupon books. This method is dangerous. Without the aid of a monthly statement, we can not track, verify and confirm our payments are applied accurately-or even received. If a mistake isn't caught early enough-fraud or accounting errors are compounded and the problem can go undetected for years leaving it impossible to correct when and if you have a dispute. Don't overlook the importance of tracking your auto and student loan payments. Without verifying how your payments are applied-you may not k now about any misapplications of payments-until the damage has been done to both your loan accounting and your credit reports.
- Many times payments made on time have been erroneously reported as 30, 60 or 90 days late-without the borrower's knowledge
- If additional principal payments are applied it is even more important to track how your payments are applied in order to make sure one error doesn't cause a domino effect of late fees and penalty payments that ultimately extend the life of your loan and cost you money.
If you don't have access to a statement, call your mortgage servicing company every 6 months and request a payment history schedule.
What happens when Fraud Occurs? People lose their homes...
Watch the below video of a former EMC employee sharing the inside story; why so many people can't get their loan out of default and why some people lost homes even though they had the money to pay off their note.
"...The media has failed to tell the full story" says Danny Schechter, producer and director of In Debt We Trust and the 'News Dissector" from mediachannel.org. See: Bringing the Wall Street Crisis to Main Street!
Professor Katherine Porter described many of the same disturbing findings in her recent study: "Misbehavoir and Mistakes..." Katherine was a guest of ours on SpotLight and during that interview we discussed her recent study and the remarkable findings that shed light on the mortgage servicing industry --and the lack of regulations this industry has. In fact, the system currently in place for servicing companies is set up in such a way that it actually provides servicing companies big incentives not to communicate with the borrower; they actually make more money by collecting late fees and penalties --and then foreclosing.
Katherine Porter's Interview on SpotLight