MORTGAGE RIGHTS
Mortgage Loan Servicing Disputes Returned Payments One clause in the mortgage turns servicer disputes into foreclosure cases. Your mortgage has an 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. Lender may accept any payment or partial payment insufficient to bring the loan current ... but Lender is not obligated to apply such payments at the time such payments are accepted. ... Lender may hold such unapplied funds until Borrower makes payment to bring the loan current."
Here is how this clause can turn your life into hell. The loan servicer charges you for a service that is inappropriate. The servicer charges you for the service by requiring you to pay an additional escrow amount every month. You contact the servicer and explain that the service charge is not right. The servicer tells you that you must pay the additional escrow charge and promises to reimburse you if the charge is incorrect. (You would use the Notice of Error procedure in the How to Protect Yourself section.) Let's assume that you cannot afford the additional payment. If you cannot borrow from friends or family, you can try sending the servicer a check for your normal monthly payment. One of three things can happen: the servicer can credit the partial payment; the servicer can return your check; or it can deposit the check in a suspense account. If the servicer returns your check, it treats your payment as not being made and charges a late fee. Servicers are notoriously slow in correcting their mistakes. A truly nasty servicer will charge a late fee for every month during the dispute even though you have tried to pay your monthly payments by sending a check. Now you have two disputes: the improper purchase of insurance and the mountain of late fees that accumulated during the dispute. If the servicer deposits your check in a suspense account, you face a similar problem. Let's say your monthly payment is $500 and the servicer wants to add $100 to pay for the service. You send a check for $500. This amount will not bring the loan current because, according to the servicer, you owe $600. The servicer will place the $500 payment in a suspense account and charge a late fee. A suspense account is a temporary parking spot for your money. If the dispute carries over to another month and you send in another check for $500, the servicer puts the payment into the suspense account, which now has a balance of $1,000. The servicer must take $600 from the suspense account and treat it as a monthly payment of $500 plus a payment of $100 to escrow. Since only $400 is left in the escrow account, the servicer cannot make another monthly payment to your account. It will treat the current month as a default and charge a late fee. Like the homeowner whose check was returned, you now have two problems: the incorrect charge for insurance and the late fees. If the dispute lasts long enough, the homeowner may not be able to pay the accumulated late fees. If the homeowner whose check was returned did not save the rejected payments, the accrued interest may be too much to handle. The servicer must wait until the loan is over 120-days before filing a foreclosure action. Once a foreclosure is started, the servicer can make the mountain even higher for the homeowner to climb by tacking on legal expenses to the amount due. Too often, the end of the story is the loss of the family home. Pyramiding of late fees, by the way, is illegal no matter what this paragraph says. Let me give you an example of late fee pyramiding. A homeowner makes a payment late and the servicer charges a late fee. The next month, the homeowner makes its regular monthly payment on time, but does not pay the late fee. If the servicer were to return the second payment or to place it in a suspense account and charge another late fee, it would be guilty of pyramiding late fees. Here are some examples of what homeowners go through when they run into the improper charge problem. The examples are taken from the CFPB Consumer Complaint Database. Our standard disclaimer applies: Mortgage Rights has no way of affirming that the facts stated in the complaints are true, and are using the complaints for illustrative purposes only. You can find the complaints in the CFPB database. Damned If I Do is Complaint ID 1378002. Damned If I Don't is Complaint ID 1510058. Damned If I Do Consumer complaint narrative My mortgage payments were current with XXXX when XXXX sold it to Nation Star Mortgage on XXXX, 2014. Nation Star claimed I did not make the payment for the month of XXXX previous to their taking over the loan, so to protect my credit, and in good faith we made an extra payment. I then provided them documentation proving the XXXX, 2014 payment was indeed made to XXXX XXXX. We have repeatedly sent in documentation to different entities within their company they told us to send it to, and made repeated phone calls to resolve the dispute. All the contacts they provided us ( XXXX. single point of contact '' & XXXX my dedicated loan specialist '' ) were repeatedly unreachable by phone and unresponsive, would not return phone calls after we left messages on their voicemail. As of today, 8 months later, they have not properly credited the account, which *should* show as paid XXXX month in advance. The only responses we get are from their research department '' who we are able to communicate with in writing but still assert the position that the loan was due for the previous month 's payment at the time they took over the loan. This is still wrong and irresponsible for the company to improperly credit my payments. The issue is simple, I made an extra payment in good faith until such time that the company can find their error, provided them with documentation to help them find their error, and have submitted numerous requests for my extra month 's payment to be properly credited to a future month. It appears they are so far incapable of simple accounting or providing a valid contact person to discuss and resolve this over a 6 month period. Damned If I Don't Consumer complaint narrative Green Tree Servicing and Mortgage ( GT ) has put me in a vise. They have fraudulently billed me for a debt I do not owe, and have filed a complaint to at least XXXX credit bureau, making it impossible for me to contract with another mortgage company. At the same time, GT is refusing to apply my on-time mortgage payments until their completely-fabricated debt is paid. I have provided GT with proof that this debt is not owed. I am now half-way to the number of days, of non-applied payments, before GT can foreclose on my home. I sent these non-applied payment, on time, to GT via certified mail. I have owned XXXX homes and have never been late with a mortgage payment, insurance payment or taxes. I have never had the least problem with a mortgage holder before GT. On XX/XX/XXXX, XXXX XXXX sold my mortgage to GT. On XX/XX/XXXX, GT billed me for {$1300.00} with no explanation other than for expenses. '' I responded with a letter asking for an explanation and itemization of expenses. I got no response from GT, so I followed up with a similar letter in XX/XX/XXXX. In a letter dated XX/XX/XXXX, GT stated the amount was for insurance paid by my previous mortgage servicer. It is ridiculous to imagine that my previous servicer, XXXX, would have covered such a debt and never mention it to me. If GT is trying to use the {$1300.00} to establish an escrow account, to which I never agreed, they are ignoring my mortgage contract, which contains an escrow waiver. To supposedly substantiate their claim, that I own them {$1300.00}, GT enclosed a GT-generated spread sheet with a highlighted line. The only thing on the line was date XX/XX/XXXX, and a negative - {$1300.00}. I responded with XXXX XXXX Declarations Pages, which is incontrovertible proof of my on-time insurance payments since owning the home. In my correspondence, I referenced my mortgage contract waiver for an escrow account. GT has a copy of my contract. I sent the correspondence and Declarations Pages to GT via certified mail, as I have all my correspondences to GT. They DID receive the evidence. They NEVER acknowledged it. GT continued to bill me for {$1300.00}. Each time I received a bill, I responded that they already have proof of on-time, monthly insurance payments since owning my home. I discovered, XX/XX/XXXX, that GT filed a complaint with at least XXXX Credit Bureau, stating that I have an outstanding debt of {$1300.00}. Before this bogus complaint, my average credit score, among the XXXX major Credit Bureaus, was XXXX. Despite a lifetime of developing good credit, Green Tree 's complaint makes it impossible for me to get another mortgage company. My XX/XX/XXXX statement from GT included the legitimate XX/XX/XXXX payment amount, a fee of {$25.00} ( towards the {$1300.00} they fraudulently claim I owe ), and an illegitimate charge for my XX/XX/XXXX payment, with a late-fee added. As with all my mortgage payments, all my life, the XX/XX/XXXX payment was made on-time. On this XX/XX/XXXX statement, GT stated they are not applying my mortgage payments until I pay the {$1300.00}, or make payments towards that debt. They made this non-application retroactive to include my XX/XX/XXXX payment. In Georgia, foreclosure can occur after 120 days of non-payment of mortgage. At the time I received this XX/XX/XXXX statement, I was already half-way to the time required, before GT can foreclose. I sent the XX/XX/XXXX payment with a demand that they apply the XX/XX/XXXX and XX/XX/XXXX payments. I did not include the {$25.00}, towards the {$1300.00}, because I can not agree that I owe it. Green Tree 's practices are fraudulent, exploitive, and have done deep damage to the lives of many people. Even more disturbing, is that they seem to get away with it. Something is very wrong!
NEXT: "Sloppy" Record Keeping
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.
Mortgage Loan Servicing Disputes Returned Payments
Here is how this clause can turn your life into hell. The loan servicer charges you for a service that is inappropriate. The servicer charges you for the service by requiring you to pay an additional escrow amount every month. You contact the servicer and explain that the service charge is not right. The servicer tells you that you must pay the additional escrow charge and promises to reimburse you if the charge is incorrect. (You would use the Notice of Error procedure in the How to Protect Yourself section.) Let's assume that you cannot afford the additional payment. If you cannot borrow from friends or family, you can try sending the servicer a check for your normal monthly payment. One of three things can happen: the servicer can credit the partial payment; the servicer can return your check; or it can deposit the check in a suspense account. If the servicer returns your check, it treats your payment as not being made and charges a late fee. Servicers are notoriously slow in correcting their mistakes. A truly nasty servicer will charge a late fee for every month during the dispute even though you have tried to pay your monthly payments by sending a check. Now you have two disputes: the improper purchase of insurance and the mountain of late fees that accumulated during the dispute. If the servicer deposits your check in a suspense account, you face a similar problem. Let's say your monthly payment is $500 and the servicer wants to add $100 to pay for the service. You send a check for $500. This amount will not bring the loan current because, according to the servicer, you owe $600. The servicer will place the $500 payment in a suspense account and charge a late fee. A suspense account is a temporary parking spot for your money. If the dispute carries over to another month and you send in another check for $500, the servicer puts the payment into the suspense account, which now has a balance of $1,000. The servicer must take $600 from the suspense account and treat it as a monthly payment of $500 plus a payment of $100 to escrow. Since only $400 is left in the escrow account, the servicer cannot make another monthly payment to your account. It will treat the current month as a default and charge a late fee. Like the homeowner whose check was returned, you now have two problems: the incorrect charge for insurance and the late fees. If the dispute lasts long enough, the homeowner may not be able to pay the accumulated late fees. If the homeowner whose check was returned did not save the rejected payments, the accrued interest may be too much to handle. The servicer must wait until the loan is over 120-days before filing a foreclosure action. Once a foreclosure is started, the servicer can make the mountain even higher for the homeowner to climb by tacking on legal expenses to the amount due. Too often, the end of the story is the loss of the family home. Pyramiding of late fees, by the way, is illegal no matter what this paragraph says. Let me give you an example of late fee pyramiding. A homeowner makes a payment late and the servicer charges a late fee. The next month, the homeowner makes its regular monthly payment on time, but does not pay the late fee. If the servicer were to return the second payment or to place it in a suspense account and charge another late fee, it would be guilty of pyramiding late fees. Here are some examples of what homeowners go through when they run into the improper charge problem. The examples are taken from the CFPB Consumer Complaint Database. Our standard disclaimer applies: Mortgage Rights has no way of affirming that the facts stated in the complaints are true, and are using the complaints for illustrative purposes only. You can find the complaints in the CFPB database. Damned If I Do is Complaint ID 1378002. Damned If I Don't is Complaint ID 1510058. Damned If I Do Consumer complaint narrative My mortgage payments were current with XXXX when XXXX sold it to Nation Star Mortgage on XXXX, 2014. Nation Star claimed I did not make the payment for the month of XXXX previous to their taking over the loan, so to protect my credit, and in good faith we made an extra payment. I then provided them documentation proving the XXXX, 2014 payment was indeed made to XXXX XXXX. We have repeatedly sent in documentation to different entities within their company they told us to send it to, and made repeated phone calls to resolve the dispute. All the contacts they provided us ( XXXX. single point of contact '' & XXXX my dedicated loan specialist '' ) were repeatedly unreachable by phone and unresponsive, would not return phone calls after we left messages on their voicemail. As of today, 8 months later, they have not properly credited the account, which *should* show as paid XXXX month in advance. The only responses we get are from their research department '' who we are able to communicate with in writing but still assert the position that the loan was due for the previous month 's payment at the time they took over the loan. This is still wrong and irresponsible for the company to improperly credit my payments. The issue is simple, I made an extra payment in good faith until such time that the company can find their error, provided them with documentation to help them find their error, and have submitted numerous requests for my extra month 's payment to be properly credited to a future month. It appears they are so far incapable of simple accounting or providing a valid contact person to discuss and resolve this over a 6 month period. Damned If I Don't Consumer complaint narrative Green Tree Servicing and Mortgage ( GT ) has put me in a vise. They have fraudulently billed me for a debt I do not owe, and have filed a complaint to at least XXXX credit bureau, making it impossible for me to contract with another mortgage company. At the same time, GT is refusing to apply my on-time mortgage payments until their completely-fabricated debt is paid. I have provided GT with proof that this debt is not owed. I am now half-way to the number of days, of non-applied payments, before GT can foreclose on my home. I sent these non-applied payment, on time, to GT via certified mail. I have owned XXXX homes and have never been late with a mortgage payment, insurance payment or taxes. I have never had the least problem with a mortgage holder before GT. On XX/XX/XXXX, XXXX XXXX sold my mortgage to GT. On XX/XX/XXXX, GT billed me for {$1300.00} with no explanation other than for expenses. '' I responded with a letter asking for an explanation and itemization of expenses. I got no response from GT, so I followed up with a similar letter in XX/XX/XXXX. In a letter dated XX/XX/XXXX, GT stated the amount was for insurance paid by my previous mortgage servicer. It is ridiculous to imagine that my previous servicer, XXXX, would have covered such a debt and never mention it to me. If GT is trying to use the {$1300.00} to establish an escrow account, to which I never agreed, they are ignoring my mortgage contract, which contains an escrow waiver. To supposedly substantiate their claim, that I own them {$1300.00}, GT enclosed a GT-generated spread sheet with a highlighted line. The only thing on the line was date XX/XX/XXXX, and a negative - {$1300.00}. I responded with XXXX XXXX Declarations Pages, which is incontrovertible proof of my on-time insurance payments since owning the home. In my correspondence, I referenced my mortgage contract waiver for an escrow account. GT has a copy of my contract. I sent the correspondence and Declarations Pages to GT via certified mail, as I have all my correspondences to GT. They DID receive the evidence. They NEVER acknowledged it. GT continued to bill me for {$1300.00}. Each time I received a bill, I responded that they already have proof of on-time, monthly insurance payments since owning my home. I discovered, XX/XX/XXXX, that GT filed a complaint with at least XXXX Credit Bureau, stating that I have an outstanding debt of {$1300.00}. Before this bogus complaint, my average credit score, among the XXXX major Credit Bureaus, was XXXX. Despite a lifetime of developing good credit, Green Tree 's complaint makes it impossible for me to get another mortgage company. My XX/XX/XXXX statement from GT included the legitimate XX/XX/XXXX payment amount, a fee of {$25.00} ( towards the {$1300.00} they fraudulently claim I owe ), and an illegitimate charge for my XX/XX/XXXX payment, with a late-fee added. As with all my mortgage payments, all my life, the XX/XX/XXXX payment was made on-time. On this XX/XX/XXXX statement, GT stated they are not applying my mortgage payments until I pay the {$1300.00}, or make payments towards that debt. They made this non-application retroactive to include my XX/XX/XXXX payment. In Georgia, foreclosure can occur after 120 days of non-payment of mortgage. At the time I received this XX/XX/XXXX statement, I was already half-way to the time required, before GT can foreclose. I sent the XX/XX/XXXX payment with a demand that they apply the XX/XX/XXXX and XX/XX/XXXX payments. I did not include the {$25.00}, towards the {$1300.00}, because I can not agree that I owe it. Green Tree 's practices are fraudulent, exploitive, and have done deep damage to the lives of many people. Even more disturbing, is that they seem to get away with it. Something is very wrong!
 MORTGAGE RIGHTS
One clause in the mortgage turns servicer disputes into foreclosure cases. Your mortgage has an 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. Lender may accept any payment or partial payment insufficient to bring the loan current ... but Lender is not obligated to apply such payments at the time such payments are accepted. ... Lender may hold such unapplied funds until Borrower makes payment to bring the loan current."
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.
Mortgage Loan Servicing Disputes Returned Payments
Here is how this clause can turn your life into hell. The loan servicer charges you for a service that is inappropriate. The servicer charges you for the service by requiring you to pay an additional escrow amount every month. You contact the servicer and explain that the service charge is not right. The servicer tells you that you must pay the additional escrow charge and promises to reimburse you if the charge is incorrect. (You would use the Notice of Error procedure in the How to Protect Yourself section.) Let's assume that you cannot afford the additional payment. If you cannot borrow from friends or family, you can try sending the servicer a check for your normal monthly payment. One of three things can happen: the servicer can credit the partial payment; the servicer can return your check; or it can deposit the check in a suspense account. If the servicer returns your check, it treats your payment as not being made and charges a late fee. Servicers are notoriously slow in correcting their mistakes. A truly nasty servicer will charge a late fee for every month during the dispute even though you have tried to pay your monthly payments by sending a check. Now you have two disputes: the improper purchase of insurance and the mountain of late fees that accumulated during the dispute. If the servicer deposits your check in a suspense account, you face a similar problem. Let's say your monthly payment is $500 and the servicer wants to add $100 to pay for the service. You send a check for $500. This amount will not bring the loan current because, according to the servicer, you owe $600. The servicer will place the $500 payment in a suspense account and charge a late fee. A suspense account is a temporary parking spot for your money. If the dispute carries over to another month and you send in another check for $500, the servicer puts the payment into the suspense account, which now has a balance of $1,000. The servicer must take $600 from the suspense account and treat it as a monthly payment of $500 plus a payment of $100 to escrow. Since only $400 is left in the escrow account, the servicer cannot make another monthly payment to your account. It will treat the current month as a default and charge a late fee. Like the homeowner whose check was returned, you now have two problems: the incorrect charge for insurance and the late fees. If the dispute lasts long enough, the homeowner may not be able to pay the accumulated late fees. If the homeowner whose check was returned did not save the rejected payments, the accrued interest may be too much to handle. The servicer must wait until the loan is over 120-days before filing a foreclosure action. Once a foreclosure is started, the servicer can make the mountain even higher for the homeowner to climb by tacking on legal expenses to the amount due. Too often, the end of the story is the loss of the family home. Pyramiding of late fees, by the way, is illegal no matter what this paragraph says. Let me give you an example of late fee pyramiding. A homeowner makes a payment late and the servicer charges a late fee. The next month, the homeowner makes its regular monthly payment on time, but does not pay the late fee. If the servicer were to return the second payment or to place it in a suspense account and charge another late fee, it would be guilty of pyramiding late fees. Here are some examples of what homeowners go through when they run into the improper charge problem. The examples are taken from the CFPB Consumer Complaint Database. Our standard disclaimer applies: Mortgage Rights has no way of affirming that the facts stated in the complaints are true, and are using the complaints for illustrative purposes only. You can find the complaints in the CFPB database. Damned If I Do is Complaint ID 1378002. Damned If I Don't is Complaint ID 1510058. Damned If I Do Consumer complaint narrative My mortgage payments were current with XXXX when XXXX sold it to Nation Star Mortgage on XXXX, 2014. Nation Star claimed I did not make the payment for the month of XXXX previous to their taking over the loan, so to protect my credit, and in good faith we made an extra payment. I then provided them documentation proving the XXXX, 2014 payment was indeed made to XXXX XXXX. We have repeatedly sent in documentation to different entities within their company they told us to send it to, and made repeated phone calls to resolve the dispute. All the contacts they provided us ( XXXX. single point of contact '' & XXXX my dedicated loan specialist '' ) were repeatedly unreachable by phone and unresponsive, would not return phone calls after we left messages on their voicemail. As of today, 8 months later, they have not properly credited the account, which *should* show as paid XXXX month in advance. The only responses we get are from their research department '' who we are able to communicate with in writing but still assert the position that the loan was due for the previous month 's payment at the time they took over the loan. This is still wrong and irresponsible for the company to improperly credit my payments. The issue is simple, I made an extra payment in good faith until such time that the company can find their error, provided them with documentation to help them find their error, and have submitted numerous requests for my extra month 's payment to be properly credited to a future month. It appears they are so far incapable of simple accounting or providing a valid contact person to discuss and resolve this over a 6 month period. Damned If I Don't Consumer complaint narrative Green Tree Servicing and Mortgage ( GT ) has put me in a vise. They have fraudulently billed me for a debt I do not owe, and have filed a complaint to at least XXXX credit bureau, making it impossible for me to contract with another mortgage company. At the same time, GT is refusing to apply my on-time mortgage payments until their completely-fabricated debt is paid. I have provided GT with proof that this debt is not owed. I am now half-way to the number of days, of non-applied payments, before GT can foreclose on my home. I sent these non-applied payment, on time, to GT via certified mail. I have owned XXXX homes and have never been late with a mortgage payment, insurance payment or taxes. I have never had the least problem with a mortgage holder before GT. On XX/XX/XXXX, XXXX XXXX sold my mortgage to GT. On XX/XX/XXXX, GT billed me for {$1300.00} with no explanation other than for expenses. '' I responded with a letter asking for an explanation and itemization of expenses. I got no response from GT, so I followed up with a similar letter in XX/XX/XXXX. In a letter dated XX/XX/XXXX, GT stated the amount was for insurance paid by my previous mortgage servicer. It is ridiculous to imagine that my previous servicer, XXXX, would have covered such a debt and never mention it to me. If GT is trying to use the {$1300.00} to establish an escrow account, to which I never agreed, they are ignoring my mortgage contract, which contains an escrow waiver. To supposedly substantiate their claim, that I own them {$1300.00}, GT enclosed a GT-generated spread sheet with a highlighted line. The only thing on the line was date XX/XX/XXXX, and a negative - {$1300.00}. I responded with XXXX XXXX Declarations Pages, which is incontrovertible proof of my on-time insurance payments since owning the home. In my correspondence, I referenced my mortgage contract waiver for an escrow account. GT has a copy of my contract. I sent the correspondence and Declarations Pages to GT via certified mail, as I have all my correspondences to GT. They DID receive the evidence. They NEVER acknowledged it. GT continued to bill me for {$1300.00}. Each time I received a bill, I responded that they already have proof of on-time, monthly insurance payments since owning my home. I discovered, XX/XX/XXXX, that GT filed a complaint with at least XXXX Credit Bureau, stating that I have an outstanding debt of {$1300.00}. Before this bogus complaint, my average credit score, among the XXXX major Credit Bureaus, was XXXX. Despite a lifetime of developing good credit, Green Tree 's complaint makes it impossible for me to get another mortgage company. My XX/XX/XXXX statement from GT included the legitimate XX/XX/XXXX payment amount, a fee of {$25.00} ( towards the {$1300.00} they fraudulently claim I owe ), and an illegitimate charge for my XX/XX/XXXX payment, with a late-fee added. As with all my mortgage payments, all my life, the XX/XX/XXXX payment was made on-time. On this XX/XX/XXXX statement, GT stated they are not applying my mortgage payments until I pay the {$1300.00}, or make payments towards that debt. They made this non-application retroactive to include my XX/XX/XXXX payment. In Georgia, foreclosure can occur after 120 days of non-payment of mortgage. At the time I received this XX/XX/XXXX statement, I was already half-way to the time required, before GT can foreclose. I sent the XX/XX/XXXX payment with a demand that they apply the XX/XX/XXXX and XX/XX/XXXX payments. I did not include the {$25.00}, towards the {$1300.00}, because I can not agree that I owe it. Green Tree 's practices are fraudulent, exploitive, and have done deep damage to the lives of many people. Even more disturbing, is that they seem to get away with it. Something is very wrong!
 MORTGAGE RIGHTS
One clause in the mortgage turns servicer disputes into foreclosure cases. Your mortgage has an 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. Lender may accept any payment or partial payment insufficient to bring the loan current ... but Lender is not obligated to apply such payments at the time such payments are accepted. ... Lender may hold such unapplied funds until Borrower makes payment to bring the loan current."
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.
Mortgage Loan Servicing Disputes Returned Payments
Here is how this clause can turn your life into hell. The loan servicer charges you for a service that is inappropriate. The servicer charges you for the service by requiring you to pay an additional escrow amount every month. You contact the servicer and explain that the service charge is not right. The servicer tells you that you must pay the additional escrow charge and promises to reimburse you if the charge is incorrect. (You would use the Notice of Error procedure in the How to Protect Yourself section.) Let's assume that you cannot afford the additional payment. If you cannot borrow from friends or family, you can try sending the servicer a check for your normal monthly payment. One of three things can happen: the servicer can credit the partial payment; the servicer can return your check; or it can deposit the check in a suspense account. If the servicer returns your check, it treats your payment as not being made and charges a late fee. Servicers are notoriously slow in correcting their mistakes. A truly nasty servicer will charge a late fee for every month during the dispute even though you have tried to pay your monthly payments by sending a check. Now you have two disputes: the improper purchase of insurance and the mountain of late fees that accumulated during the dispute. If the servicer deposits your check in a suspense account, you face a similar problem. Let's say your monthly payment is $500 and the servicer wants to add $100 to pay for the service. You send a check for $500. This amount will not bring the loan current because, according to the servicer, you owe $600. The servicer will place the $500 payment in a suspense account and charge a late fee. A suspense account is a temporary parking spot for your money. If the dispute carries over to another month and you send in another check for $500, the servicer puts the payment into the suspense account, which now has a balance of $1,000. The servicer must take $600 from the suspense account and treat it as a monthly payment of $500 plus a payment of $100 to escrow. Since only $400 is left in the escrow account, the servicer cannot make another monthly payment to your account. It will treat the current month as a default and charge a late fee. Like the homeowner whose check was returned, you now have two problems: the incorrect charge for insurance and the late fees. If the dispute lasts long enough, the homeowner may not be able to pay the accumulated late fees. If the homeowner whose check was returned did not save the rejected payments, the accrued interest may be too much to handle. The servicer must wait until the loan is over 120-days before filing a foreclosure action. Once a foreclosure is started, the servicer can make the mountain even higher for the homeowner to climb by tacking on legal expenses to the amount due. Too often, the end of the story is the loss of the family home. Pyramiding of late fees, by the way, is illegal no matter what this paragraph says. Let me give you an example of late fee pyramiding. A homeowner makes a payment late and the servicer charges a late fee. The next month, the homeowner makes its regular monthly payment on time, but does not pay the late fee. If the servicer were to return the second payment or to place it in a suspense account and charge another late fee, it would be guilty of pyramiding late fees. Here are some examples of what homeowners go through when they run into the improper charge problem. The examples are taken from the CFPB Consumer Complaint Database. Our standard disclaimer applies: Mortgage Rights has no way of affirming that the facts stated in the complaints are true, and are using the complaints for illustrative purposes only. You can find the complaints in the CFPB database. Damned If I Do is Complaint ID 1378002. Damned If I Don't is Complaint ID 1510058. Damned If I Do Consumer complaint narrative My mortgage payments were current with XXXX when XXXX sold it to Nation Star Mortgage on XXXX, 2014. Nation Star claimed I did not make the payment for the month of XXXX previous to their taking over the loan, so to protect my credit, and in good faith we made an extra payment. I then provided them documentation proving the XXXX, 2014 payment was indeed made to XXXX XXXX. We have repeatedly sent in documentation to different entities within their company they told us to send it to, and made repeated phone calls to resolve the dispute. All the contacts they provided us ( XXXX. single point of contact '' & XXXX my dedicated loan specialist '' ) were repeatedly unreachable by phone and unresponsive, would not return phone calls after we left messages on their voicemail. As of today, 8 months later, they have not properly credited the account, which *should* show as paid XXXX month in advance. The only responses we get are from their research department '' who we are able to communicate with in writing but still assert the position that the loan was due for the previous month 's payment at the time they took over the loan. This is still wrong and irresponsible for the company to improperly credit my payments. The issue is simple, I made an extra payment in good faith until such time that the company can find their error, provided them with documentation to help them find their error, and have submitted numerous requests for my extra month 's payment to be properly credited to a future month. It appears they are so far incapable of simple accounting or providing a valid contact person to discuss and resolve this over a 6 month period. Damned If I Don't Consumer complaint narrative Green Tree Servicing and Mortgage ( GT ) has put me in a vise. They have fraudulently billed me for a debt I do not owe, and have filed a complaint to at least XXXX credit bureau, making it impossible for me to contract with another mortgage company. At the same time, GT is refusing to apply my on-time mortgage payments until their completely-fabricated debt is paid. I have provided GT with proof that this debt is not owed. I am now half-way to the number of days, of non-applied payments, before GT can foreclose on my home. I sent these non-applied payment, on time, to GT via certified mail. I have owned XXXX homes and have never been late with a mortgage payment, insurance payment or taxes. I have never had the least problem with a mortgage holder before GT. On XX/XX/XXXX, XXXX XXXX sold my mortgage to GT. On XX/XX/XXXX, GT billed me for {$1300.00} with no explanation other than for expenses. '' I responded with a letter asking for an explanation and itemization of expenses. I got no response from GT, so I followed up with a similar letter in XX/XX/XXXX. In a letter dated XX/XX/XXXX, GT stated the amount was for insurance paid by my previous mortgage servicer. It is ridiculous to imagine that my previous servicer, XXXX, would have covered such a debt and never mention it to me. If GT is trying to use the {$1300.00} to establish an escrow account, to which I never agreed, they are ignoring my mortgage contract, which contains an escrow waiver. To supposedly substantiate their claim, that I own them {$1300.00}, GT enclosed a GT-generated spread sheet with a highlighted line. The only thing on the line was date XX/XX/XXXX, and a negative - {$1300.00}. I responded with XXXX XXXX Declarations Pages, which is incontrovertible proof of my on-time insurance payments since owning the home. In my correspondence, I referenced my mortgage contract waiver for an escrow account. GT has a copy of my contract. I sent the correspondence and Declarations Pages to GT via certified mail, as I have all my correspondences to GT. They DID receive the evidence. They NEVER acknowledged it. GT continued to bill me for {$1300.00}. Each time I received a bill, I responded that they already have proof of on-time, monthly insurance payments since owning my home. I discovered, XX/XX/XXXX, that GT filed a complaint with at least XXXX Credit Bureau, stating that I have an outstanding debt of {$1300.00}. Before this bogus complaint, my average credit score, among the XXXX major Credit Bureaus, was XXXX. Despite a lifetime of developing good credit, Green Tree 's complaint makes it impossible for me to get another mortgage company. My XX/XX/XXXX statement from GT included the legitimate XX/XX/XXXX payment amount, a fee of {$25.00} ( towards the {$1300.00} they fraudulently claim I owe ), and an illegitimate charge for my XX/XX/XXXX payment, with a late-fee added. As with all my mortgage payments, all my life, the XX/XX/XXXX payment was made on-time. On this XX/XX/XXXX statement, GT stated they are not applying my mortgage payments until I pay the {$1300.00}, or make payments towards that debt. They made this non-application retroactive to include my XX/XX/XXXX payment. In Georgia, foreclosure can occur after 120 days of non-payment of mortgage. At the time I received this XX/XX/XXXX statement, I was already half-way to the time required, before GT can foreclose. I sent the XX/XX/XXXX payment with a demand that they apply the XX/XX/XXXX and XX/XX/XXXX payments. I did not include the {$25.00}, towards the {$1300.00}, because I can not agree that I owe it. Green Tree 's practices are fraudulent, exploitive, and have done deep damage to the lives of many people. Even more disturbing, is that they seem to get away with it. Something is very wrong!
 MORTGAGE RIGHTS
One clause in the mortgage turns servicer disputes into foreclosure cases. Your mortgage has an 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. Lender may accept any payment or partial payment insufficient to bring the loan current ... but Lender is not obligated to apply such payments at the time such payments are accepted. ... Lender may hold such unapplied funds until Borrower makes payment to bring the loan current."
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.  MORTGAGE RIGHTS