Did you discover an interest rate miscalculation? Is the money in escrow just not adding up? These mortgage disputes can make purchasing your dream home a real nightmare.

Whether you’re in the process of securing a new mortgage or recently discovered a discrepancy on your existing loan, understanding how to resolve mortgage disputes is critical. Here are effective strategies to help you reach a swift resolution.

What Causes Mortgage Disputes?

Miscalculated Interest Rates

Miscalculations can occur at many stages of the lending process. For example, your lender may miscalculate when converting annual percentage rates to monthly rates, which means you’re paying more than you should be every month. In other cases, interest rates may rise, and a lender may accidentally apply the new rate instead of the one you’ve already locked in. While unintentional, these mistakes can cost you thousands over the lifespan of your loan.

Improper Escrow Management

You’ve probably heard your lender talk about “escrow,” but understanding how it works can be confusing—especially for first-time homebuyers.

In simple terms, escrow is essentially a savings account managed by your lender to pay your annual property taxes and homeowner’s insurance. While uncommon, lenders can mishandle or miscalculate payments held in escrow by overestimating your property tax payments, causing you to pay more than necessary every month.

Late Payment Penalties

In some cases, you may have mailed in your payment before the due date, yet the lender penalized you because it arrived after the due date. In other cases, you might accidentally be charged multiple late fees for a single missed payment or be penalized for a delay caused by the lender’s processing system.

How to Resolve Mortgage Disputes Directly

While some mortgage disputes may require legal support, often, the best course of action is to work directly with the lender. Here’s how:

• Contact loan provider: Take detailed notes about the conversation, including the representative’s name, case number, and the date and time of the call.
• Keep detailed documentation: Keep records of communication, statements, payment confirmations, and any email correspondence. If you speak over the phone, follow up with an email summarizing the conversation to create a paper trail.
• Submit a written complaint: When phone and email communication do not resolve mortgage disputes, send a formal letter. Don’t forget to include copies of supporting documentation, and allow at least 30 days for the lender to acknowledge your complaint.

How a Mortgage Dispute Attorney Can Help

When you cannot resolve mortgage disputes directly, an attorney can help by:

Reviewing Documents

Mortgage documents often contain complex language that homebuyers do not fully understand. A mortgage dispute attorney is trained to spot issues you may have missed. They will review contracts and documentation to identify violations.

Communication

A mortgage dispute attorney will often take over communication with the lender. This not only eliminates stress but also prevents you from making statements that could compromise the integrity of your complaint.

Legal Action

When negotiations break down, your mortgage dispute attorney can file complaints with regulatory agencies or initiate legal action to address issues like service errors, mishandling of funds, or misapplied payments.

Legal timelines vary with the complexity of the case. However, a typical mortgage dispute occurs in four stages:

• Initiation (1-2 weeks): During this phase, you will consult with the mortgage dispute attorney to determine if you have a legitimate case
• Investigation (2-4 weeks): If your attorney believes you have a legitimate complaint, they will review documents and correspondence and begin building a case.
• Initial resolution (4-8 weeks): Before filing a lawsuit, your mortgage dispute attorney will send a demand letter and initiate settlement discussions.
• Legal action (3-12 months): If your mortgage dispute attorney cannot negotiate a fair resolution, they may file a formal lawsuit. While most cases settle outside of court, complex disputes can take up to a year to resolve.

How to Avoid Mortgage Disputes

Work With a Reputable Lender

While many commission-based lenders act with integrity, others may push more expensive loans, rush deals, or approve loans you will struggle to repay. Because we are a non-commission-based lender, you can have peace of mind knowing that we always have your best interest in mind.

Understand Your Loans Terms

Some lenders rush borrowers through the lending process, leaving them confused and financially vulnerable. Work with a lender who takes the time to understand your needs and answers all of your questions.

Keep All Paperwork

Review and save all of your loan documents and monthly statements, payment confirmations, and property and insurance payments. If you find a discrepancy, this paper trail will provide the proof you need to resolve common mortgage disputes.

Don't Let Your Mortgage Disputes Sour Your Home Sweet Home

While these strategies will help you resolve common mortgage disputes, you can avoid them altogether by working with a reputable lender like JustChoice Lending. As a local-first, non-commission-based lender, the JustChoice Lending team is here to streamline the lending process while avoiding costly mortgage disputes. Contact us today!