The rise of debit cards, credit cards, and electronic fund transfers allows many Americans to live what appears to be a cashless life today. If America evolved to a cashless society, the speed of consumer and business transactions would continue to increase.
How to Correct Mortgage Errors
For years, homeowners have complained that mortgage companies do not adequately address concerns about their loans, do not respond to requests for information, or fail to correct errors. This has become such a problem that federal law now requires mortgage companies to formally respond to any homeowner’s written request when the request alleges the mortgage company:
Failed to accept payments or apply payments correctly;
Failed to credit payments on the receipt date;
Failed to pay escrows as agreed;
Charged unreasonable fees, or without a basis;
Failed to provide an accurate payoff quote;
Failed to timely provide transferring notices; or
Failed to provide assistance to avoid foreclosure.
Homeowners facing problems with their mortgage company have a right to demand the company research their complaint and provide a written answer within 30 days. The company must correct any mortgage error immediately, or it must provide an explanation why it believes the account is correct. It cannot simply mail the homeowner an accounting of the loan, and it cannot charge the homeowner to research the complaint.
Attorney Troy Doucet of the Dublin, Ohio law firm Doucet & Associates Co., L.P.A. regularly litigates mortgage cases on behalf of homeowners. He recommends that homeowners with concerns about their mortgage send a written letter to their mortgage company that clearly identifies the concern, includes supporting documentation, and asks for a formal correction. He cautions that the letter must be sent to the address designated to receive correspondence (not the payment address), and he recommends keeping a copy of the letter sent via certified mail.
The mortgage company must acknowledge receipt of the letter within five days, and respond to concerns within 30 days. Failing to adequately respond to the letter can trigger damages under federal law, including attorneys’ fees. If the letter does not produce the expected results, a knowledgeable foreclosure and consumer attorney should be able to help with the next step. Call (614) 944-5219 to speak with one now.
Short Sale Risks – Be Careful!
If you are in financial trouble, beware agreeing to a short sale with your lender if that means you will be contractually obligated on any deficiency between the loan and the sale price. That is, if the property sells for $80,000 and you owe $100,000, be cautious about agreeing to the sale if it means you will still need to pay the bank $20,000 (versus having it forgiven). Why?
In Ohio, if the property goes into foreclosure and is sold at auction for a $20,000 loss, the bank has two years to recoup that money from you. That is because Ohio has a two year statute of limitations on deficiency judgments. However, if you sign an agreement with the bank to pay back $20,000, the statute of limitations for contracts is 8-20 years. That means the bank will have turned a two year collection period into a much longer year one! Be careful and talk to knowledgeable counsel before entering into a short sale.
If you live in Ohio and are concerned about going forward with a short sale, call our law firm for help. Here are other things you want to do to protect yourself from longer-term liability from a short sale:
1. Make sure the contract with your selling real estate agent indicates that paying the agent a commission is not only contingent upon the short sale’s approval, but also contingent upon an approval with a “waiver of deficiency.” A waiver will enable you to avoid paying the bank back the $20,000 after the short sale is complete. Without a contingency in your agent’s agreement, you may be liable for their fees if you walk from the short sale because a waiver isn’t accepted.
2. Constantly remind your bank that going through with the short sale is contingent upon a waiver of deficiency. This will decrease the possibility that your lender will “forget” to add in a waiver when they send over the final paperwork. (However, if you think foreclosure is likely, talk to counsel about this, as insisting on a waiver may eliminate your ability to use mitigation of damages as a defense).
3. Don’t expect the short sale process to be over soon, and if you are managing it yourself, it may be wise to contact the bank every other day while you wait for your approval. In today’s short sale and banking world, the squeaky wheel gets the grease.
4. Have an attorney review the final closing documents before the short sale closing, to ensure you are protected from long-term liability. Paying an attorney $600 is a lot cheaper than being on the hook for $20,000 or more.