If you’re in trouble with your mortgage, ask for help, but not necessarily from your loan servicer. Questionable practices by loan servicers are being investigated. Allegedly mortgage servicing companies have been known to file false or inaccurate claims, assess unreasonable fees, or fail to account properly for loan payments after a bankruptcy has been discharged. Excess fees and unnecessary charges are evidently the rule. Chapter 13 involves court oversight, but servicing companies often don’t apply their fees until the bankruptcy is discharged, thereby avoiding legal oversight. A study mentioned in the Austin American-Statesman today (via the New York Times) found that almost $6 million was charged over and above the loan debts borrowers reported in the survey.
In 96 percent of the claims … studied, the borrower and the lender disagreed on the amount of the mortgage debt. In about a quarter of the cases, borrowers thought they owed more than the creditors claimed, but in about 70 percent, the creditors asserted that the debt owed was greater than the amounts specified by borrowers.