Mortgage Loan Servicer: Marred Credit, Robocalls, Harassment

by Rebecca H. from Warwick, New York

Ask Kate how to cope with a mortgage loan servicer's harassment: Marred credit and robocalls sum up Rebecca's experience with the servicer of her home loan. What is her recourse? Can she sue them? What are her rights as a mortgage borrower?

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Ask Kate: I hate my mortgage service provider...

By Rebecca H. from Warwick, New York

Mortgage Loan Servicer: Marred Credit, Robocalls, Harrassment
Dear Kate,

My mortgage service provider changed to Nationstar in 2012ish. Frankly, I just can't stand them - for two reasons.

The first is that they call me, starting the second day of the month 3-4 times daily, to request my payment. Although my mortgage is due the first, it is not late until the 17th (we're pretty month to month on the finances). It doesn't matter if the bill has been paid - they still robocall me daily...

I recently did a search online to see if I could sue them for harassment. It revealed that there's a class action law suit against them for robocalls! But it only applies to calling cellular numbers - and the filing date was the day before my online search!

Secondly, there was a situation in January 2015 where I wasn't able to make my payment on time and called to ask for help (I wasn't late yet...). They were lovely - offered to take the February payment immediately and divide the January payment into four installments.

Sounds manageable right? Not so much.

I received several phone calls each day for the entire four months - including Sundays - asking that I pay the entire balance immediately. In addition, they reported four late payments to my credit report. I have the agreement from them in writing offering me this plan but I have been unsuccessful having this blemish removed from my report.

What can I do? Can I sue them? Can I at least report them? Any advice is welcome. Rebecca

***zz-portrait-left.shtml*** Kate's Answer: I hate my mortgage service provider...

Hi Rebecca,

It wasn't until the mortgage crisis that many borrowers became familiar with loan servicer providers. Unfortunately, borrowers now also know that being coupled with a loan servicer is akin to an arranged marriage. In other words, the loan servicer is forced upon them, even after carefully shopping for a lender.

Here's the difference between loan service providers and lenders... The lender works with borrowers to finance a home or refinance an existing mortgage. The service provider processes the monthly house payments, manages escrow accounts for property taxes, homeowner's insurance and private mortgage insurance premiums, and approves loan modifications. Just to keep you on your toes, the lender and loan servicer can be the same entity.

My Personal Experience with Loan Servicers


I know first-hand as a homeowner how frustrating loan service provider problems can be. I've had a few of my own. Being ahead on mortgage payments, the servicer mistakenly processed my credit as a deficit and initiated foreclosure proceedings. I was not a happy camper. Another time a servicer failed to pay my homeowner's insurance premium from my escrow account and slapped on forced insurance at 3 times the price. Yet the onus was on me to straighten out their mess.

How to Fight Back Against Faulty Loan Servicers


When I originated mortgages, borrowers begged me to refinance their mortgages to escape the nightmare of certain loan servicers. I had to break the bad news that after the refi, they might end up right back at the same servicer. Ugh.

Which leads me to tell you that you aren't left with a multitude of effective ways to fight back against an errant loan servicer. Even so, here are some ideas. Some might not apply so don't hesitate to ignore what doesn't feel right to you.
  1. Although I seldom recommend hiring 3rd parties, you might look into companies that specialize in contacting credit bureaus on your behalf to set your records straight. Meet Dennis who set up auto-pay for his elderly mother's mortgage payments. When he found out the mortgage had gone 60 days without payment, he asked me how to fix the credit mess... Help With Credit Repair.


  2. Reach out to a NACA advocate. When Chris wrote asking how to prepare for mortgage modification, he mentioned NACA advocates. This led me to look up NACA, who I discovered has a feisty approach to dealing with lousy loan servicers... NACA Approach to Mortgage Modification and Home Buying.


  3. Contact the attorney of the class action suit to ask if they can help you too. Yes, it's a long shot but what do you have to lose? (Of course, ask them of any drawbacks before proceeding.) Here's an example of one of the largest consumer financial protection settlements in our nation's history... 2013 National Mortgage Settlement Update.


  4. Go to local press with your story. Read Patsy's story of not knowing where to turn for help... Stop Foreclosure - Embarrass Your Mortgage Service Provider.


  5. Consult a pro bono attorney. Case in point, take comfort in Tom's success who went after his loan servicer in spite of having stage 4 cancer and no money... Predatory Lending Practices, Even After Surrendering House in Bankruptcy.


  6. Become the squeaky wheel who can't be ignored by contacting your elected officials. I know what a pain it can be figuring out who to write and how to find their contact information. So I put together this cheat sheet (scroll down to the blue box)... How to Contact Washington DC, State Government Officials, CFPB, and more.

Qualified Written Request - Notice of Error


Since your credit was marred after accepting the offer to split up that one month of house payments, my final idea is to send what is called a Qualified Written Request (aka Notice of Error) to your mortgage service provider.

Under the Real Estate Settlement Procedures Act (now part of TILA-RESPA Integrated Disclosure Rule), they must respond to your complaint letter regarding the servicing of your mortgage. They have five days to acknowledge receipt of your letter, then approximately 30 to 60 days to investigate and respond. During this time, they must refrain from reporting late payments to the credit bureaus. If they don't cooperate, you have the right to seek damages in court.

Don't Be Overwhelmed


If this feels like a lot to take in, please don't get overwhelmed. Consider which idea seems the most appropriate to your situation and proceed from there. My hope is that you understand you are neither helpless nor alone when fighting back against untrustworthy mortgage service providers.

Best wishes for your future,

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