“Total mortgage-related complaints filed by borrowers with the Consumer Financial Protection Bureau fell again in the third quarter of 2014 – the fifth drop in the last six quarters, according to figures compiled by Inside the CFPB.
Data contained in the CFPB’s consumer complaint database show that such consumer gripes fell 17.6 percent in the third quarter of the year, and are now down 23.6 percent from the same period in 2013.”
“A full 26% of the complaints received that year surrounded the act of making Mortgage Payments … i.e., loan servicing, making actual monthly payments, and escrow payments.”
It’s great that the number of problems and complaints is finally down … but why is this portion of the process still so frustrating for so many Borrowers? How come so many new Mortgage holders don’t know how to make their first Mortgage Payment?
The explanation is rather simple. Unlike in the past, where a bank or Lender would handle the servicing of their client’s Mortgage and accept the monthly Mortgage and Escrow payments throughout the entire term of the loan … today’s Mortgage servicing and servicing rights are often sold to outside sources, or companies called Mortgage Servicers.
As a Mortgage Lender, I explain to my clients in detail at the time of their Application and again at their Mortgage Closing: If the servicing of their Mortgage will be sold or sourced elsewhere, when it will take place, and how it will take place at some period after the Closing of their loan. I also send my clients a “1st Payment Reminder Letter” that reiterates the detailed instructions I provided them regarding this matter.
Still, questions sometimes still pop-up regarding this portion of the Mortgage Process … and obviously they still pop-up for many other new Borrowers across the country. Issues that are causing stress and frustration.
So, I thought perhaps establishing a permanent reference point regarding the making of Mortgage Payments to new Mortgage Service providers would be helpful not only for myclients, but also other new Mortgage holders as well.
There’s certainly a whole lot to digest during a Mortgage Closing. Maybe you felt deluged with papers and info.
But at the time of Closing you probably were provided a Letter or Notice that contained coupons or instructions for monthly payments. Certainly that is the case with my company, American Portfolio Mortgage Corp. There are two (2) coupons enclosed within our client’s Closing Package.
The instructions I provide for those coupons’ use include:
“Plan on using the coupon for the payments, UNLESS otherwise notified IN WRITING regarding a change in Lender … or Mortgage Servicer. In most cases, an actual change in servicing is not done until 45 to 60 AFTER Closing.
However: The transfer of servicing may have already been initiated. So do not panic if your check for your monthly Mortgage Payment is not cashed or processed immediately.
Should you note that this delay has taken place: A delay typically means that the new Mortgage Servicer has been forwarded your Mortgage Payment, but not yet cashed or processed it.”
Note: American Portfolio Mortgage Corp. (the company for which I originate) charges No Late Fee to its clients during this 15-day grace period, if the Mortgage Payment has been sent and received.
Moving Forward: Please follow the Notices of Payments Due, whether the billing comes from your original Lender or an Assignee (the new Mortgage Servicer).
And Please Remember: NO changes can be made to your Interest Rate, Principal Balance, or monthly Mortgage Payment during a change-over to a new Mortgage Servicer. Only the Escrow Account can be affected by changes in Taxes or Insurance, over the life of your loan.
I hope the above info alleviates some of the confusion or frustrations surrounding the making of your first Mortgage Payments or working with a new Mortgage Servicer.