Can My Mortgage Company Refuse to Accept My Payment?
Yes. This is a very dangerous situation for homeowners to find themselves in.
What Gives the Mortgage Company the Right to Send My Payment Back?One clause in the mortgage turns servicer disputes into foreclosure cases. Your mortgage has the identical or similar clause: "Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the loan current."
Why Is this a Dangerous Situation?Here is an example of how this sentence in the mortgage can turn your life into hell. In our example, the mortgage company charges an improper fee, and increases your escrow payment to cover the improper fee, which makes your monthly payments increase. You contact the mortgage company and explain that it does not have the right to charge you this fee. The mortgage company tells you that you must pay the additional escrow charge and promises to reimburse you if you prove that it does not have the right to charge the fee. Let's assume that you cannot afford the higher payment, and you try sending the mortgage comany a check for your normal monthly payment, but the mortgage company returns it and charges you a late fee. You are now locked out from making payments on your mortgage, and cannot stop the mortgage company from charging more late fees as well as fees for default services, such as Broker Price Opinions. You should immediately send a Notice of Error because mortgage companies are required to respond and to respond promptly. If you do not send a NOE, the mortgage company can drag out the dispute charging all sorts of fees. These fees can accumulate to such a high level, that you cannot pay them and wind up losing your house in foreclosure.
What Should I Do?(1) Continue to send your regular payment every month. (2) If the mortgage company returns the payment, deposit it in your bank account and DO NOT SPEND IT. (3) Send a Notice of Error every month. (4) File a complaint with the Consumer Financial Protection Bureau. (5) Hire a foreclosure lawyer with experience with mortgage company driven foreclosures. (6) If the mortgage company begins foreclosure proceedings, ask for mediation immediately and bring counterclaims against the mortgage company. (6) Check your credit reports to see if the mortgage company has been making negative comments about you. (7) Dispute all negative comments with he credit reporting agency. (8) Keep a record of how you are harmed by the mortgage company's actions, such as denial of credit. (9) If they do not sue you first, sue them first.