Mortgage servicers manage many functions on behalf of the bank. Each area of service has potential for errors. Functions servicers perform can include:
- Collecting and processing payments
- Tracking balances
- Sending monthly statements
- Managing escrow accounts
- Pursuing foreclosure on defaulted loans
Whether due to harmful practices or technical problems, these errors can cause borrowers to default on their loan, which can lead to foreclosure…even if the borrower has been paying the loan as expected. Common errors include:
- Inaccurate application and accounting of payments
- Charging unreasonable fees
- Improper force-placing of insurance
- Failing to make escrow disbursements
- Dual tracking (pursuing foreclosure during loan modification)