I Have Made All My Mortgage Payments but the Mortgage Servicer is Filing Foreclosure?

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We at Saeed & Little, LLP, routinely get calls from home owners who are facing foreclosure but have made all their monthly payments and should otherwise be current on their Mortgage. The home owners are often shocked and cannot understand why the mortgage servicer refuses to help them. Furthermore, these consumers often have an incredibly difficult time finding competent counsel. Most attorneys often don’t understand the nuances of Mortgage Servicing regulations and can’t adequately help consumers victimized by such servicing blunders. The end result is often catastrophic. By the time the home owners makes their way to our offices there is a judgment against them and there is little our firm can do to help. Here are some tips on what actions to take to protect your home:

  1. Seek competent counsel. Most consumers think that they need to seek counsel from a real estate attorney. However, you should be looking for a consumer protection attorney.
  2. In many of such instances, the clerical mistake in accounting records is triggered when the mortgage servicer fails to document an event (Bankruptcy or Loan Modification) or credits a payment to the wrong account. Call you servicer to get to the bottom of the problem. Find out specifically which monthly payment was allegedly not made. Document the name of the representative and time for each call you make. Offer to provide bank statements documenting the cashed checks. Send multiple letters and include your proof of payment with the letter. Making multiple efforts to rectify the error and documenting such efforts is critical for the eventual prospects of your case.
  3. Do not wait until a foreclosure action is filed. In many states, waiting till a foreclosure is filed could result in losing a right to a jury trial.
  4. Send out a qualified written request under Real Estate Settlement Procedures Act. We will up load a separate blog on how to write an effective qualified written request at a later date.
  5. You may be able to sue under a local statute. Many state UDAP and consumer statutes require notices prior to filing suit. If are a counsel representing homeowner make sure to send adequate notices prior to filing suit. If you are in Indiana, you may have a claim under both Indiana Deceptive Consumer Sales Act and Indiana Home Loan Practices Act. Both of these statutes require pre-suit notices.
  6. Continue to make all your payments. DO NOT stop making payments until the servicer stops accepting them. Once the servicer stops accepting payments set the monthly mortgage payments aside in a separate bank account. If you are an attorney representing homeowner, deposit the monthly payment in your escrow account. This is critical for any actual damages claims.
  7. Please call our office. These cases are powerful and can result in significant recovery ranging from tens of thousands to millions.

If you are an attorney or home owner who is currently facing such a scenario it is important to seek competent help.