Trust Your Mortgage Servicer? Maybe You Shouldn't
Don't count on your mortgage servicer to be honest with you about the status of your loan modification application. That's one of the findings from an industry review by the federal Consumer Financial Protection Bureau.
The bureau released a report last week that described serious issues with the way mortgage servicers transfer accounts, process payments and work with homeowners. In addition, it discovered that some nonbank mortgage servicers may lack independent auditing or otherwise be out of compliance with federal law.
"Today's report highlights both the mortgage servicing problems throughout the industry and the challenges of making sure that nonbanks are following federal law" said CFPB Director Richard Cordray in a written statement. "Fixing both is a priority for us."
Poor communication, sloppy paperwork among problems
Mortgage servicers are companies that process loan payments on behalf of lenders, and they may handle various other duties related to these loans, including foreclosure proceedings. The CFPB report identified three areas where mortgage servicers may fail to properly protect the consumers they serve.
- Account transfers
- Payment processing
- Loss mitigation
The best and worst mortgage servicers
Customers don't always have a choice on who services their mortgage, but research suggests that there are major differences in how customers perceive various servicers.
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