I’m at a loss as to how many servicing glitches we’ve encountered this last few weeks. It’s more rife than I’ve experienced throughout the years I’ve worked in this industry.
Just over the last month I’ve had clients reach out to me for assistance on loans that I originally closed, but, as we all know, I can no longer truly assist on, unless they add me as an authorized user, or conference call me in when they speak to them.
First of all, that’s just simply asinine, that my name is on the Note, and the original loan application, I know the product and file intimately, and yet I’m unable to assist the client after close without them jumping through hoops to include me.
That being said, once I am able to assist here are just some of the recent servicing problems we have seen:
- The loan is transferred (yet again), and this time the previous servicer neglected to send it on as an impounded loan, refunded the entire amount of taxes and insurance collected over the last year to the client, and when they called to verify what the check was for, were told it was merely an escrow overage, only to discover their home insurance was canceled and they were without coverage for two weeks until their insurance company notified them.
2. The client receives a delinquent property tax notice – all the while paying into their impound account, and discovering their current servicer is unaware of their requirement to pay the property taxes. They then have to “research” their file, and eventually promise to pay the tax installment along with the penalties that have resulted from the late payments. This I’ve seen year to date on six separate transactions. Imagine the fees being earned by our county offices!?
3. The client made the first payment to the original lender per the “first payment letter” included in their final document package, only to discover that the payment had been cashed but not forwarded to their new servicer.
4. The client made the first payment to the original lender per the “first payment letter” included in their final document package, discovered it had cleared their account, and then received said cashed check back in the mail stating they need to send it to their new servicer??
5. The client received their impounded insurance money back in a refund check from their previous servicer. When they called they were told it was merely an impound account overage. The account had been transferred to the new servicer with taxes impounded only, and their insurance impound requirement just miraculously vanished. They now have to start up the insurance impound account piece all over as their current servicer is insisting they don’t have an impound account for both taxes and insurance, regardless of their final loan paperwork stipulating it in about 5 different places.
And, I could go on, like a broken record. But, I won’t….well, maybe a little.
The most problematic part of this is essentially many borrowers would like to know who their loan is going to be with, or stay with a specific company. They want the reassurance of who this company may be and how good their reputation is. Often they aren’t particularly sold on the impound account but take it either because the loan requires it, or the rate is slightly better on the loan they obtain.
As a Loan Originator, I educate our clients on the loan programs and products, sit and weigh the pros and cons of impound accounts, I tell all I know about various investors, servicers, banks, and all the while carefully abiding by the incredibly stringent compliance and regulations for fear of having to start over on a transaction because of a human error, only to discover our banks, investors, and loan servicing companies couldn’t care less about rules, loan documents, and regulation.
For many of my clients a simple phone call does not fix the error. It takes numerous calls, hold times of over half an hour (who has time to do that during the work day?) letters, and then calls to me to jump in, as the person trying to assist them has no idea what happened, how to rectify the issue, or even how to explain in layman’s terms what is actually transpiring. How can this be possible in this age of knowledge requirements, full disclosure, and a bible’s worth of rule and regulations?
I invite the CFPB to have a little looksee at, what appears to be, a rapidly growing problem in our recovering economy. People are still wary of lenders, loan officers, and the reputation ruined by the crash, only to have stepped back out into the world of real estate and be clobbered with a new round of uncertainty when all they are actually doing is paying their mortgage payments on time. We have been beaten to submission to ensure we are delivering what we are promising from beginning to end, only to be given the same tarnished reputation after investors, and servicing companies ruin what could have been a flawless transaction.
It doesn’t matter how smooth the purchase or refinance was, at close everyone is happy, but after dealing with the chaos that can ensue once the loan transfers, once again that satisfaction morphs into incredulity with only a bad taste left in our clients’ mouths, as something that was supposed to be closed continues to rear its ugly head.
Suzanna Ravin has been working in the lending industry for the last twelve years, currently managing a retail branch Peak Mortgage, a division of Finance of America Mortgage, LLC. She maintains her top originator status by remaining very hands-on with her clients’ transactions. Often referred to as the Loan Guru, she loves to be completely informed on lending guidelines, and regulations.