Loan Mod Approved But Chase Added $25k Onto Balance Of My Mortgage Loan

JSanders

LoanSafe Member
Oct 15, 2010
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0
1
I received a Mortgage Loan Modification through Chase after a LONG, DRAWN OUT, HARD BATTLE. (It nearly killed me!) The loan mod offered a reduced interest rate resulting in a lower monthly payment.

The interest rate was initially reduced for a 5 year period, then has had step increases over the last few years. I was and still am very appreciative with that aspect of the loan mod.

However, at the time of the loan modification, Chase ADDED $25,000 to the balance of my loan. I am concerned that is a predatory lending practice. I was not in arrears at the time of the modification. I have no idea why they added $25,000 to my loan balance.

At that time, I was so desperate for the loan modification in order to save my home that I accepted the loan mod with the $25,000 addition to my loan balance. Is that a normal modification practice?

Is there anything that I can do about that now...after the fact? I have paid my monthly mortgage amount every month in full and on time since the loan modification. But it still bothers me every month when I see the balance on the monthly statement knowing that it should be $25,000 less that present.
 
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Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,850
466
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Southern California
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Mortgage servicers are notorious for adding on unexplainable fees to a loan modification. In my 9 years counseling people online, I do not think one servicers has even justified and or explained these fees.

Of course it is predatory because they are preying on you when you are down and out, stressed and not thinking clearly. This is understandable due to the fact that you are losing your security - your home and roof over your head.

What can you do?

Under the Real Estate and Settlement Procedures Act (RESPA) there is a little known consumer protection law that helps borrowers who have special inquiries and or disputes that are not being answered or met with their mortgage servicer. Under Section 6 of the Real Estate & Settlement Procedures Act (RESPA), a borrower can request that the lender document all claims for fees.

You can request in writing what is called a “Qualified Written Request (QWR). In this letter you can as about all questionable fees, entries, documentation and a life of loan history (all fees and payments ever made on your mortgage) from your lender.

When you contact your servicer in writing, make sure to document and include your account number. You’ll want to clearly explain why you feel your account is incorrect. Make sure that you send this separate from your payment and don’t send it to where you send your monthly mortgage payments. You’ll want to send it certified mail or fed ex to your mortgage servicers customer service address.

Within 20 business days of receiving your letter, your mortgage servicer must send you a written response acknowledging it. Your servicer then has 60 business days, to correct your account or determine that it is accurate. Your servicer must then send you a written response of the action they took and why, along with the name and telephone number of someone you can contact for additional assistance.

Here is a sample letter:

The following is a sample qualified written request from you, the borrower, to a lender. Use this format to address complaints under the Real Estate Settlement Procedures Act (RESPA).

Attention Customer Service:

Subject: Your loan number
Your Name
Your Address
Your City, State, Zip Code

This is a qualified written request under Section 6 of the Real Estate Settlement Procedures Act (RESPA).

I am writing because:

Describe the issue or the question you have and/or what action you believe the lender should take.

Attach copies of any related written materials.

Describe any conversations with customer service regarding the issue and to whom you spoke.

Describe any previous steps you have taken or attempts to resolve the issue.

List a day time telephone number in case a customer service representative wishes to contact you.
I understand that under Section 6 of RESPA you are required to acknowledge my request within 20 business days and must try to resolve the issue within 60 business days.

Sincerely,

Your name

REMEMBER: This letter SHOULD NOT be included with your mortgage payment, but should be sent separately to the customer service address.

You SHOULD continue to make the required mortgage and escrow payment until the request is resolved. You may bring a private right of action under Section 6, if you suffer damages due to the lenders servicing of the loan. See the RESPA statute and regulations.

http://www.loansafe.org/qualified-written-request-2
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,850
466
1,000
49
Southern California
www.loansafe.org
Please keep in mind that mortgage servicers will often ignore your requests because they know that most people do not have the time and or money to bring a lawsuit. If you cannot sue, then they can break the RESPA law with little to no recourse.