Three Timely Mortgage Issues To Look Out For
In light of current events and weather patterns, I thought I’d give our readers the run-down on three mortgage-related problems I have seen recently.
If you were granted a Covid-19 related payment deferment, note that your lender’s loan servicing system of operation may not be ready and willing to handle your deferment or any other loan accommodation offered by your lender. For example, if you have been granted a deferment but are still receiving past due collection notices and/or your credit report shows a recent delinquency, your lender is violating your consumer rights by misrepresenting the status of your loan and, worse yet, your loan may be headed down a troubled path. Also keep in mind during a period of forbearance or deferment, no fees, penalties or interest shall accrue on the borrower’s account beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract.
Believe it or not, new home purchases have been strong despite the economic impact of the pandemic. Unfortunately, we’ve seen loan originators and appraisers manipulate home purchasers by concealing the true cost of home ownership. Two of our recent cases come to mind.
In the first case, both the appraiser and the lender falsely represented to the potential homeowners a property under consideration to purchase was not located in a federal flood hazard zone. Relying on an inaccurate appraisal and a faulty flood zone certification, the purchase was completed. Months later after the loan was sold to a new lender, these folks, now homeowners, were for the first time informed their mortgage loan required them to purchase an expensive annual flood insurance policy as their property was indeed located in a flood zone. As such, Bordas & Bordas filed a lawsuit to protect these consumers’ rights and to right an obvious wrong.
In another recent case filed by Bordas & Bordas on behalf of a homeowner, the lender informed the purchaser his flood insurance cost was only $300 per year by disclosing to the purchaser the same government subsidized, flood insurance premium that had been paid by the seller and underwrote the loan accordingly. Unfortunately, as any reputable lender would know, the subsidized (or “grandfathered”) flood insurance rate paid by the seller is not available to a new purchaser. After the loan was sold, months later the new homeowner was informed for the first time he must purchase a flood insurance policy with an annual premium starting at $2,300.
We may not live on the coast but storm (or flood) season has nonetheless arrived. Be aware that there are a complicated set of rules a mortgage servicer or lender must observe when dealing with a homeowner that falls victim to a natural disaster. Depending on the type of loan, the identity of the ultimate owner of the loan and other circumstances, the mortgage servicer may be required to offer disaster-specific mortgage relief to the homeowner, including a moratorium on foreclosure sales, the suspension of foreclosure eviction, the suspension of credit reporting, the suspension of late charges, mortgage forbearance and loss mitigation options such as loan modifications. Unfortunately, it is not at all unusual for mortgage servicers, some more than others, to treat natural disaster victims badly, to ignore the rules or contracts and make their problems worse.
Please contact Bordas & Bordas to learn more about your rights if you’ve been subjected to the practices described herein or have otherwise been treated unfairly by your mortgage lender.
In light of current events and weather patterns, Jason Causey is giving our readers the run-down on mortgage-related problems that have occurred during this time.