How to Keep Your Home and Avoid Bankruptcy Pitfalls

It's often difficult to find out where you need to send the request, but Porter says most courts say the address on your payment coupon is good enough.

If you don't agree with the servicer's statement, the first thing to do is call the servicer to dispute it. But it can also be difficult to find a phone number. If you are already in foreclosure, you should contact either the court, the foreclosure trustee, or whoever is handling the sale of the house, and tell them about the dispute. (Foreclosure procedures vary from state to state.)

If you're in bankruptcy, you should either contact your bankruptcy attorney or the bankruptcy trustee.

Make Sure You're Really Caught Up

If you're behind on payments and trying to figure out how to catch up, don't assume that all you owe is the missed payments -- late charges, deferred interest and other kinds fees such as appraisals can pile up quickly. (If lenders think they might have to foreclose, they want to know exactly how much your property is worth in the current market.) If you just send in the missed payments, and it's not the full amount you owe, your check might be sent back or the funds placed in a "suspense account." In theory, Porter says, the lender will eventually credit that money, but in the meantime you still aren't current and the penalties and fees continue to pile up.

Part of the problem is that borrowers are writing two separate checks each month, one for their current mortgage payment and another that goes toward the arrearage. This multiplies the opportunities for services to miscredit payments. If servicers do make mistakes, they can be hard to catch because the person or party paying the bill may not be getting the mortgage statement. Porter says that in some jurisdictions, only the bankruptcy trustee gets a statement and in others just the debtor.