What to do about bad servicing?

Oftentimes, once a mortgage loan is closed, the servicing of the loan is sold to a different financial institution. Servicing agents provide account statements, receive the mortgage payments, impose late fees and often pay the property taxes and insurance out of the borrower's escrow fund.

Unfortunately, you can.t control whether or not the servicing of your loan is sold, nor can you control to whom it's sold. But if you're experiencing bad serving of your loan, you do have some options.

First, submit a written complaint to Customer Service. Include your name, loan number, and the property address or your mailing address. Include the sentence "This is a qualified written request" under Section 6 of the Real Estate Settlement Procedures Act (RESPA). RESPA requires that the servicing agent respond within 20 business days and try to resolve the issue within 60 days. By including this language in your complaint, you're obligating them to respond to you. In your written complaint, describe the problem you're having and how you feel the problem should resolved. If you've tried to resolve the issue before, describe those attempts and their outcomes. Also, give them your daytime phone number.

If a written complaint doesn't resolve the issue, send a written complaint to your state Attorney General's Consumer Protection Division. The complaint will be forwarded to the government agency that oversees your servicing agent.

We recommend that you keep a close eye on your mortgage statements. If you notice anything "fishy", address it immediately. Don't wait.