Mortgage servicers sometimes make serious errors when handling a homeowner’s loan account. Fortunately, federal law provides a way for you to make the servicer correct the error or provide you with certain information if you believe that your servicer made a mistake—or multiple mistakes—when managing your account.
Read on to learn more about how you can dispute an error or obtain valuable information from your servicer.
Servicers manage loan accounts. Your servicer could be the bank that owns your loan or it could be a separate company. (To learn which mortgage-related tasks servicers handle, see How Mortgage Servicing Works.)
A federal law, the Real Estate Settlement Procedures Act (RESPA), provides a way for you to dispute errors with your servicer and obtain specific information about your account. The way to do this is to send your servicer a letter.
Under amendments to RESPA, your letter will be considered a “notice of error” or a “request for information.” There are different time limits for the servicer to respond to your letter based on which type of request you send.
If you send a letter to notify the servicer about a particular error that it made when managing your loan, the servicer must correct the error, provide notification of the correction, and give contact information for you to follow up—or let you know that no error occurred along with the reasons for this conclusion.
Common types of servicer errors. With so many different duties and variables, there's a lot of room for error when it comes to loan servicing. Under the law, the following servicer errors (among others) can be addressed in a notice of error:
(Learn more about errors made in the mortgage servicing industry.)
Time frame to acknowledge your notice of error. Your servicer must acknowledge a written notice that asserts a particular error within five business days.
Time frame to respond to your notice of error. How much time the servicer gets to respond to your notice of error depends on the type of error that you claim the servicer committed:
The servicer may generally extend the 30-day period by 15 days if, within the 30-day period, it informs you about the extension and tells you why there is a delay. However, a 15-day extension is not allowed if your notice of error is about a payoff statement or certain errors pertaining to foreclosure.
A request for information can be useful if you’re not sure whether or not the servicer made an error and you want to get information about your account to help you make this determination. For example, you might want to see the servicer's records regarding your payment history.
Time frame to acknowledge your request for information. If you send a written request for information, the servicer must acknowledge your inquiry within five days.
Time frame in which servicer must respond to your request for information. The servicer must generally give you the information you requested within 30 business days—or explain why the information is not available, as well as provide you with the name and contact information of someone you can follow up with.
When the 30-day response period can be extended. The servicer gets 15 extra days to respond if it notifies you about the extension within the 30-day period and lets you know the cause of the delay.
When the servicer must respond sooner. The servicer must provide the information you requested within ten business days if you’re trying to find out the identify, address, or other contact information for the owner of your mortgage loan. (To learn how to find out who owns your loan, see How Do I Find Out Who Holds My Mortgage?)
The servicer doesn't have to address your notice of error or request for information in some situations, like if:
But the servicer can't just ignore your notice, even if it fits one of the four criteria above. It must notify you within five business days after determining that it doesn’t have to deal with your notice or request, and give you the basis for the determination.
You can find a sample notice of error letter and request for information letter, along with useful information about what to include in the letter, at the Consumer Financial Protection Bureau’s website.
If you’re sending a notice of error and also want to request certain information, you can send a single letter. Or you can send your notice of error and request for information letters separately.
If the servicer doesn’t respond to your notice of error or request for information—or if the servicer disagrees that it made an error or refuses to provide you with certain information—and you're facing an imminent foreclosure, consider talking to an attorney immediately. An attorney can advise you about what to do in your situation and help you enforce your rights. If you can’t afford a lawyer, a HUD-approved housing counselor might be able to help you.