RIGHTS REGARDING YOUR MORTGAGE

From the column "The Nation's Housing" by Kenneth Harney

"Are you aware that if you complain to your mortgage company in any manner except that prescribed by federal law, you could miss out on some important federal consumer protections? And when you do complain or make an inquiry to your mortgage lender or loan servicer, do you know how long the firm legally has to respond to you, and then to solve your problem?"

"The most critical federal protection you have in your dealings with your lender or mortgage servicer is a mandatory deadline schedule for handling your problems. Provided you make your complaint or inquiry in the proper manner, your lender or servicer may be subject to federal civil penalties if it fails to "acknowledge" your communication in writing within 21 business days of first receiving it, and to correct or clarify the problem within 60 business days of initial receipt.

But what's the proper manner to make a complaint or an inquiry? That's a key point. Federal "complaint resolution" deadlines are only in effect when you send a "qualified written request" to the company servicing your loan. That servicer may be the original lender who provided you the mortgage, or a firm who subsequently purchased the rights to service your loan from the lender.

A qualified written request, according to federal regulations, cannot be a note scribbled on your monthly payment coupon. It has to be a separate, distinct "correspondence" from you to the lender or servicer that includes your name, your account number, and your inquiry or complaint..."

"...the only way to ensure coverage under the 20/60 day federal consumer protection rules is for you to send a formal written request, including your account number and name.

If your dispute with the lender or servicer involves an allegation of unpaid or overdue funds, invoking the 20/60 day rule can give you an added blanket of protection: During the 60 business day period...the company is prohibited from informing credit bureaus of your alleged non-payment..."

"You are entitled to advance, written notice of any transfer of your loan servicing account to another firm. Your lender, in other words, cannot simply write or call you one day and say, by the way, we sold your loan to Ajax Mortgage last month. Send all your payments to Ajax, not us. Goodbye.

Instead, you must receive federally prescribed notifications in writing form both your current lender and the new firm that will be handling the loan. The latest--repeat, latest--date you as a home- owner can be informed of a servicing transfer is 15 days before the date the successor firm is scheduled to take over the loan. The advance notice must give you the name, address and toll-free servicing information of the new firm.

No later than 15 days after the transfer occurs, the new servicer must contact you in writing and establish procedures for the new relationship. But here's the crucial point: for the first 60 days after your loan has been transferred, you may not be hit with late penalties for any mortgage payment you send in time to the first servicer, rather than to the new firm. You are held harmless, in other words, for the innocent mistake of getting confused about where to send your payment."

--1993, The Washington Post Writer's group