What Is Predatory Mortgage Servicing?
Predatory mortgage servicing refers to companies that target borrowers with low credit ratings with the goal of extracting as much profit from them as possible. The logic behind this is simple: the lower your credit rating, the greater the possibility that you will end up being late on your payments, defaulting on your loan, or even forced into foreclosure, meaning that the servicing company will have more administrative work to manage and can charge greater fees to service the loan.
It is important to keep in mind that not all mortgage servicing companies will try to take advantage of you in the event that your financial situation is unstable. There are numerous respectable mortgage servicing companies in this industry that have become successful and have developed a reputation for providing fair treatment to mortgage borrowers. However, it is important for you as a borrower to understand how the incentives in the mortgage servicing market work in practice so you are not caught off guard in the event that you encounter a predatory mortgage servicing company.
Tellus TIP:
This conflict of interest in the mortgage servicing industry has been addressed by certain federal laws that require the servicer to make its best efforts to help you to avoid foreclosure.
- What Are the Specific Formal Requirements for Periodic Statements?
- What Are Coupon Books and When Can They Replace Periodic Statements?
- When Are Servicers Allowed to Stop Providing Periodic Statements or Coupon Books?
- How Are Periodic Statements Delivered?
- What Is the Rule on Interest Rate Adjustment Notices?
- When Should I Receive an Interest Rate Adjustment Notice?
- What Information Must Be Included in the Initial and Ongoing Interest Rate Adjustment Notices?
- What Is the Prompt Payment Crediting Rule for Servicing Companies?
- What Are the Prompt Payment Crediting and Payoff Statement Rules for Servicers?
- Can the Loan Servicer Refuse to Provide You with a Payoff Balance Statement within 7 Days?
- Can I Choose My Mortgage Servicing Company?
- Are There Any Rules Regarding Written Communication with Servicing Companies?
- Are Servicers Allowed to Charge a Borrower for Force-Placed Insurance Coverage?
- What Are the General Rules Regarding Servicing Policies, Procedures, and Requirements?
- Are There Any Special Rules for Servicers When Dealing with Delinquent Borrowers?
- What Is the "Successors in Interest Rule" for Servicing Companies?
- How Should I Inform Servicers When I Become a Successor in Interest?
- Am I Liable for the Loan Once Confirmed as a Successor in Interest?
- Can I Change My Mortgage Servicing Company?
- Can I Turn to a Government Agency to Complain Against a Mortgage Servicing Company?
- Are There Any Federal Laws Protecting Me from Mortgage Servicers?
- What Are the Mortgage Servicing Rules Issued by the Consumer Financial Protection Bureau?
- What Is the Periodic Statement Rule for Mortgage Servicers?
- Are There Any Exceptions to the Periodic Statement Rule?
- How Many Periodic Statements Am I Entitled to Receive?