When Mortgage Companies Decline Payments: Know Your Rights

A mortgage company is a company engaged in the business of originating and/or funding mortgages for residential or commercial property. A mortgage company is often just the originator of a loan; it markets itself to potential borrowers and seeks funding from one of several client financial institutions that provide the capital for the mortgage itself.

That, in part, is why many mortgage companies went bankrupt during the subprime mortgage crisis of 2007-2008. Because they weren’t funding most of the loans, they had few assets of their own, and when the housing markets dried up, their cash flows quickly evaporated.

A mortgage company is often just the originator of a loan; it markets itself to potential borrowers and seeks funding from one of several client financial institutions that provide the capital for the mortgage itself.
Mortgage lenders usually offer a portfolio of mortgages to potential homebuyers including fixed-rate, adjustable-rate, FHA, VA, military, jumbos, refinance, and home equity lines of credit (HELOCs).

The Equal Credit Opportunity Act prohibits credit discrimination based on age, race, color, religion, national origin, gender, marital status or because you get public assistance. It’s also illegal for lenders to discourage you from applying or to impose different terms or conditions because of these factors.

Finally, it prohibits lenders lenders from denying mortgages to retirees if all standard criteria are met—things like your credit score, the size of your down payment, your liquid assets, and your debt-to-income ratio. Although it is unclear how long the trend will continue, positive economic data indicates that for the immediate future homebuyers can continue to benefit from low mortgage interest rates.

Can My Mortgage Company Refuse Payments From Me?

A lender cannot move forward with foreclosure unless they first try to contact the borrower and suggest options that are available to avoid losing the home in a trustee sale. If your lender refuses to accept your mortgage payments, you should call a lawyer.

Has this happened to you?

1. You fell behind on mortgage payments and your lender will not accept anything less than the full amount to bring the account current.

2. You have applied for a loan modification and your lender is sending you foreclosure notices at the same time.

3. Your lender refuses to accept or apply your monthly payments even though you send them to the lender.

If you have fallen behind on mortgage payments and you are facing foreclosure it is common for the lender to send a notice of default with an amount that you must pay to catch up. Your mortgage company may refuse payment from you if they have started the foreclosure process. They may attempt to collect the full amount of arrears that you owe to bring your account up to date. If you go to court, you can force the lender to accept payments and start a payment plan to catch up.

Call us if you want to:

1. Save your home from foreclosure

2. Force your lender to accept your mortgage payments

3. Dispute the amount that your lender is claiming or enter into a payment plan to catch up.

Once the foreclosure process has begun with the notice of default, your lender is required to accept monthly payments if you file for bankruptcy, and you enter into a Chapter 13 plan. Your lender is also required to accept payments if you are approved for a loan modification. Refusal to accept payments in either case is grounds for a legal complaint and you should talk to a foreclosure lawyer about how to move forward.

Once you fall behind on mortgage payments, it is nearly impossible to refinance your home mortgage. Your best bet is to start looking into loan modification programs with your lender and to talk to a foreclosure lawyer if you have been denied for hardship assistance.

Are You Unable to Make Your Monthly Payments on Your House?

By now, most people have been affected by the economic downturn and have lost a job or suffered an illness that makes it difficult to keep up with mortgage payments. A loan modification is a voluntary offer for assistance by your lender which is intended to lower your mortgage payment to an affordable level.

If you have been denied for assistance by your lender, mortgage litigation is possible depending on your situation. It is best to seek legal advice and discuss your case with Utah foreclosure lawyers who are handling this type of law. Ascent Law helps homeowners who are fighting to save their homes by filing lawsuits based on illegal lending practices. If you think that you may be the victim of wrongdoing by your lender, call to schedule a free meeting with a foreclosure attorney at Ascent Law today.

Do you Need Legal Representation?

If you are behind on mortgage payments and you want to avoid foreclosure, it is best to talk to one of the foreclosure lawyers in Utah at Ascent Law and schedule a free meeting to discuss your case. We help people file for bankruptcy and sue lenders to save their homes. When you meet with the foreclosure attorneys at Ascent Law , we discuss estimated mortgage payments that may be affordable. We look at how many months behind on mortgage payments you are, and we present legal solutions that are best for you, in your situation. The best way to see if this makes sense for you is to call Ascent Law LLC and schedule a Free Legal Consultation today.

What to Do When Your Mortgage Payment Is Declined

Mortgage borrowers and their lenders have certain contractual obligations to each other, including adhering to loan repayment terms. As a borrower, you have a duty, for instance, to make your mortgage payments, and the lender has a duty to accept them in most cases. However, the terms of most mortgage loans allow lenders to decline payments from borrowers who fall behind on their mortgage payments. Getting your mortgage lender to accept a payment once it’s declined takes some work, but it can be done.

Double-check to make sure you followed the instructions for submitting your mortgage payment. Verify the account number, mailing address and other account information. If you’re attempting to send a partial payment, the lender can reject it if partial payments aren’t accepted. Once you rule out any possible errors, send the lender a Qualified Written Request asking for an explanation and initiating a complaint. The lender must try to resolve the issue within 60 days of receiving your request. During this period, your credit is protected. The lender can’t report the unpaid mortgage until the issue is resolved.

If you aren’t delinquent on the loan and your lender is refusing your payment, file a complaint with the Consumer Financial Protection Bureau. You can submit the complaint online or over the phone. Provide detailed information about what exactly happened, and be as specific as you can to help the bureau understand your situation. Include dates and the response from the lender when you attempted to make your payment. Indicate your desired resolution. The mortgage company receives a notice of your complaint and has 15 days to respond.

What Happens In Mortgage Law

If your mortgage company refuses your payments, your mortgage is going unpaid. Depending on your state laws, the foreclosure process may begin after just a single missed payment. Not only can the lender foreclose, but your credit score will also suffer. Mortgage companies will typically begin reporting missed payments to the credit bureaus after 30 days. Since payment history accounts for 35 percent of your FICO score, a late payment can wreak havoc on your score.

Possible Explanations

Mortgage loans and the rights to service them are bought and sold. If your mortgage company rejects a payment, the loan may have been sold to another lender. Legally, your lender is required to notify you in writing at least 15 days before another servicer takes over your account. The letter should state the name of the new company, the mailing address, the phone number and the name of a person you can contact with questions. The company purchasing your loan is also expected to mail a similar letter with contact and payment information. If you haven’t received any letters from a new servicer, you should contact your current mortgage company to request clarification.