Myth: “Banks don’t make accounting errors.”
Fact: It seems to be a common belief that all banking institutions are orderly and on top of things and as long as you make your payments on time there won’t be any problem. However, this is not always true. Just making timely payments may not stop the bank from reporting negatively to the credit bureaus, which impacts your credit score.
Everyone knows how important it is to review your credit report to search for errors, but few people take the same diligence when reviewing their monthly loan statements. If your credit report wrongfully contains late payments it can take years to restore your credit. Or if you’re a victim of identity theft on top of having an error-ridden credit report, undoing the combined damage can take years.
Ms. Richardson says that:
In a nutshell, if you are paying a mortgage, student or auto loan without tracking and verifying your payments have been properly accounted for and applied accurately, you could be headed for trouble– without even knowing it.
Many borrowers are not properly notified that their mortgage and/or the servicing rights were sold or transferred -let alone -to whom. Uninformed of the transfer, the borrower continues sending their payments to the wrong entity, and are completely unaware their mortgage had fallen into default -left to incur hefty penalties, late fees, and accrued interest charges. When the borrower is stunned by a notice of default from the new company, they soon learn that it arrives with a demand for thousands of dollars. They are informed that without making full payment -immediately, their home will be foreclosed on.
Myth: Mortgage servicing companies are on your side and want to help you.
Fact: Actually getting a loan modification is quite a feat. They just don’t happen very often. A sensible solution to the foreclosure problem would be to give more homeowners loan modifications, but the Obama administration’s programs to do this have failed. Some of these programs have even forced homeowners through unfair or illegal foreclosures after the homeowners were led to believe their mortgage had been modified. At the end of July 2010 there had been roughly 421,000 permanent loan modifications from their banks…out more than 1.5 million trial modifications and 3.1 million loans that are eligible.
Myth: Foreclosure is always deserved.
Fact: Some of the many reasons for foreclosure are not legitimate. The bank can say that paperwork is “out of order” and “needs review.” The paperwork can turn into a big mess and it takes a lot of effort and attention to be certain that there are no fake or fabricated documents. Lenders aren’t afraid to foreclose, even if it is because of an error on their end.
What happens if the borrower is foreclosed on by bank #1 and the real owner of the note comes forward to get paid? Hmm, is bank #1 going to pay bank #2? I doubt it. The fact is many innocent homeowners who have paid their mortgages on time have had their homes “stolen”…reverse bank robbery.
There is no such thing as a consumer being too vigilant. You can’t always believe what you hear and you should do your own research and always “look before you leap into judgment.”
If you have further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us.
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