Loan Modification

What Are Those Fees Added To My Mortgage?

By Kurt O'Keefe, Detroit Consumer Attorney

Frequently, they are junk fees, so the mortgage servicer can make more money off of you.

Kirsti Marohn of the St. Cloud Times wrote a story explaining how the mortgage servicer benefits from screwing up your records so they can charge added fees onto your mortgage.

Mortgage servicers service your mortgage, but they are hired and fired by the mortgage company.

They are paid according to the contract with the mortgage company.  They are to service the mortgage, by figuring out escrow accounts, verifying taxes and insurance are paid, collecting payments, and correctly applying them to principal and interest.

They get a flat rate for those services.

So, if you are a servicer, how do you up that bottom line?

Well, late fees help.  According to their contracts, the servicers usually get to keep more dollars from what they do when mortgages are in default.

Unfortunately, that creates a financial incentive for the servicer to put you, and keep you, in default.

Of course, they do not work for you, so you cannot fire them.

When you see fees you do not understand, ask for a written explanation, and exercise your rights under the Real Estate Settlement and Procedures Act and send a letter requesting a complete accounting, certified mail.

If you do not understand the explanations you get, or, you get no explanation, may be time to consult a consumer attorney.

Full post as published by Mortgage Law Network on July 09, 2009 (boomark / email).