RSSThe mortgage company filed bankruptcy
Feb 19
Client’s mortgage company (M1) went bankrupt and was bought out by new mortgage company (M2). Client’s last payment to M1, right before C got notice of the transfer to M2, has been tied up in the BK process for 6 months. Apparently M2 cannot access records showing that this payment was made and received until the bankruptcy is settled or progresses. C has been getting notices of deficiency for the missed payment, but the letters also say that this won’t be reported to credit bureaus and that once M2 gets access to all records and payments M1 received, any errors will be corrected. Yet the deficiency letters keep coming. Start by sending a Qualified Written Request under RESPA. If no response within the statutory timeframes, debtor has a cause of action regardless of servicer’s problems with its records. Failure to credit a payment may be a violation of state collection practices or unfair and deceptive acts laws. C has canceled checks or other solid evidence that the lost payment was made. What’s strange is that M2 recently sent a letter offering to correct statements mailed out showing interest payments (for tax purposes) if C could present certain types of evidence that the statement was incorrect. No such offer has been made on the mortgage payment itself. M2 has simply said it will be corrected once it can access M1′s records.
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