What can I do if my lender has refused to accept my payments? 3 Answers as of August 01, 2013

Since my loan was sold to a new lender, my new lender has refused and sent back my monthly payments. This has been going on for almost 10 months now. They are trying to force me into a loan modification. While I was willing to do this to take advantage of new lower interest rates; they have done nothing but drag their feet. Every week, I need to give them something new and then the next week I need to give them another bank statement because the one I gave them 3 months ago is too old. Month after month after month, I am fed up with the games. To make matters worse, they have reported me to the credit agencies for nonpayment. My credit score has gone from the mid 700s to barely over 500. Since high school, I never missed any bill payment, not even when I was on deployment to the Middle East. This infuriates me! I have tried to get legal assistance but mortgage lawyers want close to 5,000 just to save my house. I have continued to make my mortgage payment to a savings account but I do not want to take any of it because I am afraid that the bank will ask for all the payments due at once. Is what they are doing legal? Should I just spend the money on a lawyer? Will they then force me to pay all of the monthly payments that they refused? The state is Nevada in the wonderful City of Sparks.

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Janke Legal Consulting | Bruce C. Janke
You have posted a question about a Nevada property on the California site. Without knowing more, I would say that the bank is only allowed to refuse to accept your payments if you were in default at any point. What reason has the lender given you for refusing your payments? A lender cannot legally refuse to accept payments for the purpose of putting you in default so that it can foreclose. You are doing the right thing by depositing your payments into a separate bank account. Some lenders do try to pressure borrowers to seek a modification because they make money from the federal HAMP program for every application they process, whether or not they grant the modification. Your problem of getting the runaround on your modification application is unfortunately very common. Despite the HAMP program, only a small percentage of loans are actually getting modified. This is not an question that can be easily answered in this type of forum. You should be able to find a local attorney who will meet with you for a half hour for little or no fee and answer your questions so you know what your options are. Check with your county bar association to see if it has a lawyer referral program. Or search on line for lawyers who specialize in real estate and foreclosure law and ask for a free consultation. You can't make a decision about what to do without giving all the facts to a qualified expert who can answer your questions.
Answer Applies to: California
Replied: 8/1/2013
Danville Law Group | Scott Jordan
If you were not late on your payments when the loan was sold, it would have been illegal for the new bank to refuse the payments. Loan modification is difficult and often a complete waste of time and you eventually lose your house. It is shameful what is happening to you. I think your best option is to hire a real estate or bankruptcy attorney in your area. You may have a good lawsuit against the lender. Or, you may need to file bankruptcy to get caught up and resume your payments. A discussion with an attorney will make things clearer for you. Spend a little money for a consultation and then decide. Good luck!
Answer Applies to: California
Replied: 8/1/2013
The Law Offices of Mark Wm. Hofgard, Esq.
The Law Offices of Mark Wm. Hofgard, Esq. | Mark Hofgard
If you are not in default, never missed a payment, and only thing that has changed is that you have a new servicer, then YES, you should be retaining counsel. There are a number of claims that you may have as against the lender and the new servicer. Did you send a Qualified Written Request pursuant to the Real Estate Settlement and Procedures Act (RESPA)? Have you made a written dispute of the debt to the three credit reporting agencies (this will be a first step in establishing liability under the Fair Credit Reporting Act)? Have you paid all the taxes and insurance - or does the lender maintain an escrow account? In a lawsuit you would seek to reinstate the loan and ask the court to declare the rights and liabilities of the parties, including the fact that you are not in default. You may also claim damages to your credit, but under the FCRA there are certain steps that must be taken. If a foreclosure has been initiated, you may ask the court to quiet title to your property by removing the Notice of Election and Demand filed against the property. The first thing you need to do is get your Qualified Written Request sent to the servicer stating the errors in the account, and requesting that it be corrected. If the servicer fails to respond, it may be liable under RESPA. There are also a number of important state law claims that may be asserted: breach of contract, and breach of the implied covenant of good faith and fair dealing.
Answer Applies to: Colorado
Replied: 8/1/2013
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