A mortgage loan servicer is a financial services company that collects payments on a mortgage loan. Some of the largest mortgage loan servicers include Nationstar Mortgage (aka “Mr. Cooper”), Ocwen Loan Servicing, PHH Mortgage, Wells Fargo Bank, Chase Bank, Bank of America, CitiMortgage, Quicken Loans, and Shellpoint Mortgage.
Decades ago, it was common for lenders to service their own portfolios of loans; now, specialized servicing companies most frequently collect loans owned by others. In the modern era of complex financial products, many home loans are often packaged together and sold in slices to investors, with a bank acting as trustee. The servicer, in turn, acts as the bank’s agent for collecting payments and otherwise handling mortgage loan accounts. Most homeowners are unable to choose their mortgage loan servicer, and the servicer may change without the permission of the homeowner.
Mortgage servicing is regulated by a number of federal and state laws, which are intended to protect consumers from abuses. Applicable laws may include the Real Estate Settlement Procedures Act (“RESPA”); Michigan Regulation of Collection Practices Act (“MRCPA”); Michigan Mortgage Brokers, Lenders, and Servicers Licensing Act (“MBLSLA”); Equal Credit Opportunity Act (“ECOA”); and sometimes debt collection laws like the Fair Debt Collection Practices Act (“FDCPA”) and Michigan Occupational Code (“MOC”). Westbrook Law PLLC has represented consumers in lawsuits based on violations of each of these statutory protections. We have obtained relief ranging from saving the home from foreclosure to six-figure recoveries for clients.*
Many types of mortgage servicing abuses entitle the homeowner to relief under the law; for example:
- Initiating or threatening foreclosure when the loan account is not in default or when the right to sale clause in the mortgage has not been triggered; i.e., wrongful foreclosure
- Imposing “lender placed insurance” or “force placed insurance” when the property is already insured and the servicer does not have a reasonable basis to believe the property is uninsured
- Demanding excessive payments
- Failing to apply payments in timely fashion or at all
- Charging late payment fees or other fees where they are not justified
- Failing to provide monthly statements, especially where the loan has a variable interest rate and/or is a home equity line of credit (“HELOC”)
- Failing to respond appropriately to written questions about the loan servicing or notices of error regarding loan servicing
- Disregarding or ignoring a loan modification agreement
- Improperly accounting for escrow payments for property taxes and/or hazard insurance
- Failing to include required notices and disclosures with communications
If you have been subjected to any of the foregoing abuses, or think your mortgage loan servicer has violated your legal rights in some other way, please contact us for a free consultation.
*Each individual lawsuit is unique and the outcome may be affected by many factors. Westbrook Law PLLC makes no guarantee of a successful result in any lawsuit.