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Mortgage Servicing Agencies’ Failure to Perform Their Duties

foreclosure defense lawyerThe Consumer Financial Protection Bureau is the new agency that is supposed to regulate mortgage servicing companies. In a recent review of mortgage servicing companies this agency found some services to be “sloppy” when dealing with transferring paperwork when loans are sold. They also found misapplication of payments on mortgages and the failure of mortgage servicing companies to pay the taxes on the homeowners’ homes on a timely basis.

Homeowners Don’t Know Whom They Are Supposed To Pay

When the average homeowner purchases his or her home they take out a mortgage. Often shortly after they take out their mortgage the mortgage is sold by one lender to another. The second lender thereupon hires a mortgage servicing company to service the loan. Sometimes, a few months later, the second lender sells the mortgage to a third lender. This leaves the homeowner unsure of where, and to whom, they should pay their mortgage. This causes consumers consternation as to whether they are making their payments to the correct entity and if they are receiving the full credit for their payments.

Consumers Financially Injured By Mortgage Servicing Companies

Tax payments on real estate are usually due and owing in December. There have been mortgage servicing companies that have delayed making these payments until January. When a mortgage servicing company pays the taxes in the following year, the homeowner loses the important tax deduction for the mortgage payment in the prior year. This causes the homeowner to pay higher income taxes due to the loss of this tax deduction.

The Consumer Financial Protection Bureau has set up a new mandated set of rules financial servicing companies must comply with. These rules go in effect in January of 2014. The purpose of these rules is to deal with issues that have come up during the mortgage loan modification process which have been exposed under the HAMP program. The following are a list of some of the problems that have been uncovered by this agency concerning mortgage services:

  1. Abnormally long application processes.
  2. The lack of quality control standards and the supervising of underwriters.
  3. The failure to send out denial notices to homeowners.
  4. The failure to have written policies and procedures related to mortgages.
  5. Disorganization and understaffing by mortgage servicing companies.

Mortgage Modifications

Many homeowners have been living with the panacea that they can obtain a mortgage modification for their home under the HAMP program only to find out that only a small number of the applicants get final approval of mortgage modifications. Hopefully this agency will deal with the numerous problems that exist today.

homeowner advocatesElliot S. Schlissel, Esq. is a foreclosure attorney who has published more than fifty (50) articles related to foreclosure defense.

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