I hope this newsletter finds you doing well. Last week, I wrote about mortgage escrow accounts and the importance of reviewing your annual escrow statement. This week, I’d like to focus on what to do if you identify an error on your mortgage escrow account.
If you notice that your mortgage company has made inappropriate charges to your escrow account or made an error on your escrow account, you have the right to send your mortgage company a letter called a Notice of Error pursuant to the federal Real Estate Settlement Procedures Act, often called “RESPA.”
While there are some loans that are exempt from RESPA, the law does apply to most residential mortgages in this state. Among many other rights, RESPA provides the right to send a Notice of Error to your mortgage company to put them on notice of the error on your escrow account. So how do you do this?
Step One: Find the Correct Address To Send Your Notice of Error
Many mortgage companies have a special address for notices of error. Sometimes this address is listed on your mortgage statements and sometimes it is listed on the mortgage company’s website.
If you cannot find the address, call your mortgage compay to find out. A Notice of Error can be invalid if you send it to the incorrect address.
Step Two: Prepare The Notice of Error
CLICK HERE for a sample Notice of Error and other helpful information from the federal Consumer Financial Protection Bureau (“CFPB”). Make sure you include your name, property address, loan number, and a detailed explanation of the error. Make sure you also include any necessary documentation and save a complete copy of the letter for your records.
Step Three: Mail the Notice of Error
Make sure to mail the Notice of Error to the designated address via certified mail and save your tracking number.
In most cases, your mortgage company is required to acknowledge receipt of your Notice of Error within five business days from date of receipt and is required to send its full response to you within 30 calendar days.
If the mortgage company corrects the error, great. If they do not, your main options will be to either 1) send a second Notice of Error with any additional supporting information that may not have been included with the initial letter or 2) file suit against the mortgage company.
Of course, if you need to file suit, we strongly suggest consulting with competent legal counsel because these issues can get tricky and you do not want your otherwise-valid lawsuit to be thrown out due to a technicality.
There are a variety of state and federal laws (like RESPA) that provide you with robust consumer rights. Don’t ever hesitate to invoke those rights if your mortgage company is breaking the law.
I hope this information has been helpful. I hope you have a wonderful Sunday!
Until next time,
Ryan C. Torrens, Esq.
Consumer litigation attorney