Mortgage Servicer not cashing my check

In My Humble Opinion
1

My mortgage was sold to a new bank early this month and that means I have a new mortgage servicer. This happened before I made my April mortgage payment.

This new company seems shifty to me, and has near universal bad reviews online with plenty of nightmare scenarios, so I am concerned and want to be cautious.

They sent me a temporary paper coupon to mail with a paper check. Online payment wasn’t available yet and they have a much shorter grace period than my old lender.

Check was mailed to them April 6th and still hasn’t cleared my bank or credited to my mortgage per their website. That’s a long time, right?

I’m concerned this company is sitting on my paper check to claim my payment was late to hit me with a late fee. Also, my mortgage hits the 80% Loan to Value mark where I can drop PMI later this year, but that seems to be at the discretion of the servicer, and they could wrongly claim I was late paying my mortgage to deny my request.

I understand there is a 60 day grace period for late payments when a mortgage is sold, but my understanding is that only applies if the old servicer had been paid for the month.

I could pay the new servicer online now, but it would be “late” by their standard. I’d also need to put a stop payment on the check I mailed them.

Advice on what I should do would be very appreciated.

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2

The potential costly issues would seem to warrant a few hundred spent an RE lawyer’s way.

3

How about calling them and asking why they haven’t cashed your payment?

4

I did, and they say it sometimes takes 7 business days to receive and up to 7 business days to apply to my mortgage. Dubious

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5

Did you ask if their accounting department consisted of one old man in a green eyeshade filling in the books with a quill pen?

6

I ran into this with a transferred loan. I had to start putting a tracking number on my mailed payments, so I could prove when I had sent them (and they had received them). There was always something wrong with their online system.

Keep calling. The squeaky wheel may get the grease, at least this first month. Then track everything from now on.

7

You misunderstand the 60 day grace period; scroll down and you’ll see it doesn’t hinge on your being current, it’s a federal protection regardless.

Chances are the servicer boarded hundreds or even thousands of loans from your old bank along w/ yours. There’s a temporary delay in getting payments applied simply due to the increased volume and that’s likely why your check hasn’t been cashed yet; less than 2 weeks isn’t a long time - 30 days is closer to worrisome. But the industry standard is that your check will have been scanned when they got it, so the right date will show on your statement.

Mortgage servicers frequently handle sub-prime mortgages that are held by people who don’t always understand the terms of their loan; when I read through reviews of them on the CFPB and RipoffReport as well as other sites I see confusion over mortgagee’s and servicer’s rights more often than naught. Have you looked up your new servicer on theCFPB site?
It’s rare the servicer decides when the PMI can come off; that’s usually down to the backer of your mortgage, especially if you have an FHA or other gov’t backed entity behind it. Send them a letter asking exactly when you can take off PMI and they will have to respond w/ an approximate month and year. You should also (in my opinion) ask them for an escrow analysis to be sure your payment couldn’t be smaller. And if you haven’t gotten a homeowner’s insurance quote in the last 18-24 months, chances are you can get a better deal by shopping around; this will also lower your monthly payment so long as they handle the escrow.

8

Not entirely implausible. Especially if they’re a marginal servicer with poor processes and tech.

9

Oh, if only I could believe they operated in good faith but we’re simply behind the times technologically. My review on this topic is that people with mortgages are basically at the mercy of the loan servicer, and some of them are really EVIL.

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10

Evil, really? :rolleyes:
Many times the servicer is who keeps a person from losing their house due to the person’s ignorance over the terms and responsibilities of the parties to their mortgage; it’s in the servicer’s interest to keep you in your home, they can’t service a mortgage that gets foreclosed.
If you don’t want a mortgage, use your own money to buy the house you can afford.

11

My new servicer has a presence in the CFBP database.

I’m current on my mortgage and it’s not an FHA loan. Everything I am reading seems to imply, reading between the lines, that a transfer of mortgage doesn’t free one of late fees. Rather, late fees cannot be incurred by the borrower if the old lender was paid on time. If that’s an incorrect reading, I’d be happy to hear it.

I decided to pay a month’s mortgage directly thru their website. That would be for May (due 5/1), unless I decide to stop payment on the check they haven’t cashed yet. Or maybe I’ll just wait on the check a couple weeks now and if still not cashed, stop payment on it.

The take home message here is servicing a loan, which should be a straightforward process, is not. Confusing borrowers works to the servicer’s advantage in that it enables them to collect bogus fees. Many of those fees are not large enough to spend a lot of time fighting, but are unethical, if not outright illegal.

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12

Did you even read the link from my first post that clearly explained how the 60 day grace period around a service transfer works? B/c so long as you’ve tried to pay either servicer within the 60 days you won’t get a late fee. I don’t know why you’d read btwn the lines unless you wanted to find something to justify being mad that things are taking longer than you want them to at the company servicing your mortgage on behalf of the bank whose money you’re using instead of your own.

The fees you feel are unethical or illegal are specifically allowed by the mortgage you agreed to; so you must have thought they were fine when you read through all your closing documents before signing on the dotted line.

The CFPB investigates all the complaints in their database; did they find for or against your servicer? Are the complaints similar to the experience you’re having right now? Is the servicer’s response similar to what you’re being told now?

ETA - the take home message here is most people do not understand all the terms of their mortgage.

13

I read the link, but I did not make a copy of the check I mailed and thus have no way to prove I sent payment to the new servicer on any specific date. This is actually the first time I’ve ever made a mortgage payment by check and that it is in some sort of limbo for quite a while and I am reading scary things about my new servicer makes me very nervous.

I don’t remember agreeing to certain fees when I signed my mortgage, and at any rate my old servicer was not in the habit of having fee for payment by internet, late fees with little grace period, etc. Maybe the new servicer will defy my expectations, but my trust had to be earned, and what I’ve seen so far hasn’t done that.

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14

I’ve made a second payment via their website, so that is in the 60 days window, so now just need to hope this double payment will work out without something unexpected happening.

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15

I had a similar experience when my loan was sold. When they did get around to applying the check, they applied it 100% to interest instead of partly to the principal. Since it was a HELOC in paydown, the payment was about $1200 principal, $300 interest. So of my $1500 payment, $300 covered the interest and the rest went into limbo, and was not applied to the principal.

That sparked a phone call, and I was told they had purchased a whole bunch of loans and they were still getting the kinks worked out and the next month’s statement would fix all of the problems.

It didn’t.

The monthly statement was so fucked up from a basic math standpoint, it was laughable, if it hadn’t been my mortgage. For example, it was adding the monthly principal to the outstanding principal balance, which is a neat trick if they can get the customers to go along with it. Seriously, whoever programmed the monthly statement either had no idea how a mortgage worked, or did not perform the most basic checking of its functionality.

It took me two months and about three letters accompanied by copies of the statement covered with circles and arrows and six paragraphs on the back of each one explaining what each error was to finally get the problems corrected to within about $30 of where I should have been, at which point I gave up when they sent a letter basically ignoring my explanation of the final problem by saying that since they had corrected my account, it must therefore be correct.

(The final problem they refused to fix was that my previous lender had a payment/interest cycle starting on the fifth, but the new lender moved it to the 1st, with no allowance made for the five days of duplicate interest I paid.)

The good news is that after about the first four months, they got their statements fixed and for the last two years payments have been processed smoothly and correctly…which is a low bar, but it is better than what it was initially.

So good luck, and make sure they apply your payments correctly. Also, if you have concerns, call on the phone, you might get someone who is competent and sympathetic and willing to explain what is going on behind the scenes enough to reassure you that things will eventually get worked out. I know it is nerve wracking, and it is your house, but if you mailed payment on the 6th, the check not having posted yet still falls within the range of “slow mail/back office process” rather than “evil bastards intent on racking up late fees.” But only for a couple more days.

16

It’s not J.G. Wentworth is it? Because they bought my mortgage a while ago and have been screwing with it ever since. They said I didn’t have enough escrow and asked for a payment of $400 or they would add it to my payment. I paid and they STILL added it to my payment for a couple of months. A few months later they did it again!

The end of last year they did the same thing, asking for like $400 and upping my payment something like $60. In the last year and a half since they bought it my payments have gone up $75-80 a month.

On top of that my payment address changed a couple of times and the loan number changed as well. I was writing them checks instead of doing them online as it was easier. Now that I’ve gone back to doing it online they wait a good 7-10 days to take an electronic payment out of my account. I’ve always wondered what they would say if I paid a couple of days after the 1st and they didn’t take it out until after the 15th.

This isn’t something that happened a time or two, it happens every month. I wait days for it to come out. Everyone else it comes out the same day or the next, but not my mortgage.

17

They should just apply the second payment as a full principal payment.

18

You are entitled to see their escrow calculation annually, and the amount they can hold over and above actual expenses is limited to a maximum 2 month cushion. Both of these requirements fall under RESPA - the federal Real Estate Settlement Procedures Act.

That depends on the original mortgage contract. Some call for an overpayment to be refunded, some apply it to principal and some apply it to the next scheduled payment.

19

ataraxy22, I don’t know what bank you use but I’d send all future payments thru you’re bank’s bill pay system. If the processor is big enough, you’re bank will send them electronically (ACH) & they’ll get there much faster than mailing. Even if your the only customer of your bank that uses that particular mortgage processor & they mail a paper check, there will be records of when it was cut & mailed because your bank has that info.

20

It wasn’t Wentworth. It did just settle some class-action lawsuit related to it’s practices though.

Good idea Spiderman. I’ll check to see if my bank recognizes them.

So the payment posted today after I made the May mortgage payment. Looks like I wrote the check wrong (numbers correct, words left out a “five hundred”), and so I now have most of my May payment in a suspense account until I pay the last bit. This is a positive development, but I am still highly suspicious of the company because they seem to have a lot more fees than the old servicer did, a much shorter grace period, and they also screwed up some of my personal information (wrong phone numbers, wrong dates for when my county taxes get paid). I will be monitoring things closely over the next few months.

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