What is a mortgage servicer? A mortgage servicer is a company that manages your mortgage. The mortgage servicer can be the mortgage holder—the bank or investor that actually loaned you the money for your mortgage, or one of the federal mortgage lenders, Fannie Mae or Freddie Mac. But often, the mortgage servicer is an independent company.
A recent player on the scene is Newrez, which took over a large portfolio of mortgages from Specialized Loan Servicing (“SLS”) in May of 2024. Newrez is just one mortgage servicer out there—there are several, and many of them make frequent mistakes which they then do not correct when their customers file disputes.
It’s common for your mortgage to travel from servicer to servicer while you have your mortgage. Your mortgage itself often travels to new holders, when a large portfolio of mortgage loans is sold from one investor to another. When your mortgage is sold in one of these transactions, it is common that you will get a new mortgage servicer.
Mortgage servicers, however, are frequently sloppy when they take on a large volume of new mortgages. They misapply payments or don’t apply them at all. They mess up escrow instructions. They mess up the credit reporting on the account. In general they frequently make mistakes and the mistakes rarely benefit the homeowner—they usually benefit the mortgage holder.
Congress passed a law to protect consumers from dishonest or sloppy mortgage servicers. The law is called the Real Estate Settlement Procedures Act, and this law affords homeowners a number of protections. The key protections which my firm handles involves mortgage servicers that screw up the payment, escrow or credit reporting schedules when they take over a loan from a previous mortgage servicer or mortgage lender.
If your mortgage servicer—particularly a new mortgage servicer—messes up your payment amount, your escrow payments, the credit reporting on your mortgage account with the credit bureaus, the insurance requirements, any of these—you may have rights under RESPA.
How to pursue a Respa claim
To pursue a RESPA claim, your first step is to very specifically identify the mistakes that the servicer is making on your mortgage account. Gather all the documents you have to show that the mistake is in fact a mistake—bank statements, insurance statements or tax payment receipts showing that you have made your payments on time and your account is current. Prepare a certified letter to the mortgage servicer.
You need to determine the correct address for sending your dispute letter. Best tip here is to google your mortgage servicer along with “dispute resolution address” or “qualified written request” address. To show as an example, I did this for Newrez. Here’s the Newrez address for sending disputes:
Correspondence address for error resolution: P.O. Box 10826, Greenville, SC 29603. Always send these dispute letters certified mail. You want to have proof that your letter was received by the mortgage servicer, and the date that it was received.
Your letter is technically called a “qualified written request” under RESPA. In short, it is referred to as the QWR. You need to send a QWR to protect your rights under RESPA.
Again, be clear in identifying the mistake or mistakes that the servicer has made, along with what you need to be fixed. Attach any evidence or exhibits to your letter to make it very clear that you have evidence on your side. If this is a credit reporting dispute, attach a copy of the page of your credit report showing the mistake.
The servicer has 30 days after receipt of the letter to make the necessary corrections. If the servicer refuses to do so or fails to do so, you can bring a lawsuit under RESPA and can claim all of your damages, including emotional distress damages, and a statutory penalty. RESPA provides that the mortgage servicer will pay your attorney’s fees and costs if you win, so my firm is often able to sign these cases up on a contingency or semi-contingency basis.
You also need to dispute in writing to the credit bureaus of your new mortgage servicer has messed up the credit reporting on your account: Remember—if there is also a credit reporting issue, i.e. the servicer has issued false credit reporting to the credit bureaus, you need to dispute in writing with the credit bureaus as well. RESPA ties in nicely with the laws that protect consumers from false credit reporting.
So, if you’re being tormented by mistakes from your new mortgage servicer, you have rights. But, it starts with a good QWR letter. Always be professional, include your evidence and keep your tone in the letter very professional and respectful. Remember that that letter may one day be Exhibit 1 in your trial against your mortgage servicer, so you always want to show yourself as the professional, respectful and reasonable party.
I hope this helps.