How Ohio Homeowners Can Prepare For And Respond To Mortgage Servicer Errors

Mortgage servicing mistakes are more common than many people in Ohio realize, and the results can be quite serious. A simple mistake, such as the incorrect application of a payment or the misuse of an escrow account, can escalate into serious problems, including late fees, damage to the homeowner’s credit rating, and even foreclosure. Understanding how mistakes happen and how the homeowner can take action to avoid them is vital. 

Common mortgage servicing errors 

Mortgage servicer activities include payment collection, management of escrow accounts, and servicing of any modifications or forbearance agreements entered into by borrowers. Errors can occur in the following:

• Unapplied or uncredited payments, particularly after a change in servicer
• Escrow errors, resulting in higher payments than necessary each month
• Inaccurate late charges or default notices
• Inadequate servicing of modifications or loss mitigation requests
• Inaccurate credit reporting

These errors can occur when a loan is sold or transferred to a new servicing company, resulting in a high degree of confusion and errors in servicing the loan. 

Steps homeowners can take to prepare 

Preparation is one of the best defenses against servicing mistakes. Ohio homeowners are advised to:

• Keep detailed records of all payments, communications, and account statements.
• Verify the accuracy of the account statements by carefully scrutinizing the monthly statements.
• Pay particular attention to any escrow account activity, especially if the homeowner has changed their insurance or property taxes.

Credit reports are also important. 

Responding to servicing errors 

When a mortgage servicing issue is identified, the homeowner needs to act quickly. The first step usually involves filing a dispute claim or a “qualified written request” against the servicer. This puts the servicer on the back foot because they must respond within a certain period of time.

One thing to note is that homeowners should not rely on making phone calls to communicate with the servicer. Written communication helps to create a paper trail that can be used later to prove a case against the servicer if needed. During the dispute process, the servicer cannot proceed with some actions against the homeowner. 

Legal protections for Ohio homeowners 

The Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), protect consumers from unfair business practices by the servicer. Homeowners can dispute errors, receive a response in a set number of days, and even recover monetary damages.

If you’re an Ohio homeowner whose experienced servicing errors or wrongful foreclosure, you can sue the servicer if they don’t correct the problem or violate the law. 

When legal help makes sense 

While not all servicing disputes need to go to court, legal advice can be very helpful in dealing with ongoing mistakes, foreclosures, or credit issues. A seasoned consumer protection lawyer can assess the situation, communicate with the servicing company on the homeowner’s behalf, and advocate for legal relief if necessary.

Mortgage servicing mistakes should not be dismissed. By acting quickly, documenting everything, and seeking legal advice, Ohio homeowners can safeguard their rights and stop small mistakes from becoming huge blunders. 

Talk to a Columbus, OH, Consumer Protection Lawyer Today 

Kohl & Cook Law Firm, LLC, represents the interests of Columbus residents who are facing foreclosure. Call our Columbus consumer lawyers today to schedule an appointment, and we can begin discussing your next steps right away.