PDF 6162

JANUARY 2014
Have a mortgage?
What you can expect
under federal rules
Youve got support when you

look for information or help.
As you manage your mortgage payments, you rely on getting accurate and prompt information
from your mortgage servicer. Federal rules for mortgage servicers support you. The rules help
you understand how your payments work, give you tools if you have problems making your
payments, and give you protections from wrongful actions taken by servicers.
Your mortgage servicer is the company that collects your monthly mortgage payments. Your
mortgage servicer also works with you if you have trouble making your payments.
Youll receive billing information in writing.

Servicers have to give you a written mortgage statement each billing cycle showing the following
information, as it applies to your situation:
Current bill
What you owe
How much money is applied to principal, interest, and escrow
Late payment fees and the date you need to pay the amount to avoid the fee
Payment options, if your mortgage loan has multiple payment options, and an
explanation of whether the principal balance will increase, decrease, or stay the same
under each option
HAVE A MORTGAGE? WHAT YOU CAN EXPECT
Past payments
How your total payments have been applied, since your last statement and since the
beginning of the year
Transaction activity, with the amount and date of charges or credits that affect your
current bill
Information on partial payments (that is, payments you made that were less than the full
amount owed) and what must be done for the money to be applied to your loan balance
Other account information
The principal amount you currently owe on your loan
The interest rate, and if you have an interest rate that could change, the next date it is
scheduled to change
The penalty for paying off your loan early, if there is one
General contact information for your servicer
The special mailing address, if there is one, for written requests for information about
your loan or for reporting an error your servicer has made
How to contact a housing counselor for help
If youre more than 45 days behind on your payments: Notice of delinquency
The date you became delinquent
Your account history for the past six months
How much to pay to bring your account current
Possible risks and costs, such as foreclosure, if you dont bring your payments up to date
Information about any foreclosure avoidance options that youve agreed to, if applicable
Information about housing counseling
A notice whether the servicer has started the foreclosure process
Your servicer doesnt have to send a monthly statement if it has already sent you a book of
coupons to send in with your payments. The coupon book must also contain certain information
about your account and about how to contact the servicer. If you are 45 days behind on your
payments, the servicer must send you a written notice that includes all the information listed
under notice of delinquency above.
There are exceptions if your lender is a small servicer. Small servicers are exempt from this rule
and many other requirements. Small servicers (together with related companies) can service no
more than 5,000 mortgages each year, where they and their related companies are the lender.
Or, they can be Housing Finance Agenciesgovernment agencies that offer a specified number
of mortgages with low rates for low- and middle-income homeowners.
Your payments will be credited promptly.

Servicers have to apply your full payments to your account as of the day they come in. If you pay
only part of what you owe, the servicer may hold your partial payment(s) in a special account.
And the servicer must tell you about this on your monthly statement. When that special account
collects enough money to make a full payment of principal, interest, and any applicable escrow,
the servicer has to credit that payment to your account.
Youll get a quick response when you ask about paying

off your loan.
If you write to ask how much it will cost to pay off your mortgage, the servicer generally has
seven business days after receiving your request to answer you.
You cant be charged for insurance you dont need, or

overcharged for force-placed insurance.
If you fail to keep your home insured, your lender usually has the right to buy and charge you for
insurance to cover the lenders interest in your home. This insurance is called force-placed
insurance.
Force-placed insurance is usually more expensive than a policy you buy, and it generally protects
only the lender, not you. The insurance cost varies. The servicer cant overcharge you. It is
allowed to charge you only the amount permitted by state insurance regulations or an amount
that is reasonably related to the costs of providing the insurance.
The servicer must warn you at least 45 days before it charges you for a force-placed insurance
policy. The notification tells you what kind of insurance you need. You might use the time to
shop for a better or lower-cost policy.
If you choose to buy your own policy, the notification also tells you to how to prove to the
servicer that you have insurance. The servicer has to remind youat least 30 days after sending
the first notification and at least 15 days before it charges you for force-placed insuranceif you
still havent provided proof to the servicer that you have the insurance you need.
If you provide proof of your own insurance after youve been billed for force-placed insurance,
the servicer has to cancel its force-placed insurance. Youll receive a refund of the premiums and
fees paid while your own policy was in effect.
You might have an escrow account from which the servicer pays your insurance bill. In that case,
the servicer generally must continue your existing insurance policy if possible, rather than buy
force-placed insurance.
Your complaints and information requests will be

resolved quickly.
If your servicer doesnt properly apply a payment or charges improper fees, you should send
your servicer a complaint in writing. When you write to your mortgage servicer to ask for
information or to complain about certain errors, the servicer generally has seven days (excluding
weekends and holidays) to acknowledge your letter.
Then, the servicer has 30 to 45 business days to resolve the complaintwhich means they have
to respond to information requests, resolve any alleged errors, or explain to you why they
believe no error was made.
Examples of errors include when the servicer:
Does not apply your payment correctly
Charges improper fees
Gives you inaccurate information about foreclosure and loss mitigation options
Starts a foreclosure process or foreclosure sale in violation of the loss mitigation rules
Makes any error relating to the servicing of your mortgage loan
If the error is related to foreclosure, the servicer generally has to respond before the date of the
foreclosure sale. Theres an exception: If the servicer receives a complaint within seven days of
the sale, the servicer just has to make a good-faith effort to respond to it.
Many servicers have set up specific addresses for information requests and errors, so that your
request is received by specially trained employees. This address appears on your monthly
periodic statement or coupon book and on the servicers Web site. Take care to mail your
request to the correct address.
Your servicer has to follow good customer service policies.

Mortgage servicers have to set up their business so they can:
Access correct information about your loan
Tell you how to submit complaints and requests for information
Respond promptly and correctly to your complaints and requests for information
Pass along correct information about your account when the servicer transfers the
servicing of your loan to another company
Properly evaluate an application for relief if you are having difficulties paying your loan
Keep records for at least one year after you pay off your loan, or after the loan is
transferred to a new servicer
If you have an adjustable-rate mortgage, youll have at least

two months warning when your payments are about to
change.
If you take out an adjustable-rate mortgage, the servicer must notify you about the first interest
rate adjustment well in advance. Youll get the first notice at least seven months before you owe
a payment at the adjusted interest rate. The advance notification needs to show:
An estimate of the new interest rate and payment amount
Alternatives available to you
How to contact a HUD-approved mortgage counselor
For the first interest rate adjustment, and for any adjustments that come later that give you a
different payment amount, your servicer must send you another notice, at least 60 days in
advance, telling you what your new payment will be.
You can get help if youre

having trouble paying your
mortgage.
Your servicer must tell you about the help thats available to you, and must consider you for that
help, if you are having trouble paying your mortgage. Youll have to complete specified steps at
the right times.
A good first step is to get expert advice in a face-to-face or telephone meeting with a HUDapproved housing counselor. Housing counselors talk to homeowners like you full-time. There is
little or no cost to you. You can find a HUD-approved housing counseling agency near you, by
visiting consumerfinance.gov or calling 888-995-HOPE (4673).
Youll be contacted when youre having trouble making your

payments.
When you dont pay your mortgage, your mortgage servicer must try to contact you to talk about
the situation no later than 36 days after your payment was due.
The servicer has to tell you in writing about mortgage workout options that may be available no
later than 45 days after you are late on the payment.
The mortgage servicer has to assign personnel to help you once youre 45 days late on your
mortgage, and sooner if youve asked for help.
You can apply for help, so do it promptly.

If youre having trouble paying your mortgage, you can apply for help from your servicer. The
first step is to tell your servicer you are interested in a foreclosure prevention option, such as a
loan workout or short sale.
Before 45 days have passed after your first missed payment, your servicer is required to mail you
information about how to apply for mortgage assistance (sometimes called a loss mitigation
application). Youll probably be asked for income documents and other financial information
along with the application. Fill out the application completely and return it with the documents
as soon as you can.
Once you have submitted an application, the servicer has five days to review it. The servicer will
either confirm your application is complete or give you a list of additional information and
documents it needs. Plus, the servicer will give you a date by which you should return the
information and documents. When you submit the additional information and documents to the
servicer by that date, you can get the most protection available to you under federal rules, even if
the servicer asks for more documents later on.
But, you need to act fast. Once youre 120 days behind on your payments, the servicer can start
the foreclosure process if you havent submitted a complete application.
Youll find out your options.

The servicer uses your loss mitigation application to put together your foreclosure prevention
options. The servicer must evaluate you for all the foreclosure prevention options available to
you, as long as your complete application is received at least 37 days before your scheduled
foreclosure sale. However, that doesnt mean the servicer or the owner of your loan has to offer
any specific foreclosure prevention (or loss mitigation) options.
Loss mitigation options could include:
Temporarily suspending or reducing your payments (a forbearance)
Permanently changing your loan terms to an amount you can afford (a modification)
Allowing you to leave your home without repaying the full amount you owe, through a
short sale or other foreclosure alternative
Within 30 days after you submit a complete application, the servicer generally has to tell you in
writing what foreclosure prevention options you are eligible for. They also have to tell you what
options they considered but did not offer, and why.
If you submit your complete mortgage assistance application at least 90 days prior to a
scheduled foreclosure sale, youre entitled to 14 days to accept or reject the foreclosure
prevention offer. If you submit the complete application at least 37 days prior to a scheduled
foreclosure sale, youre entitled to seven days to accept or reject the offer.
You can seek review of the mortgage servicers decision

about your loan modification request.
If a servicer denies you a loan modification, on a trial or permanent basis, you can ask for a
review of this decisionas long as you sent in a complete mortgage assistance application at
least 90 days before your foreclosure sale. Your appeal needs to be submitted within 14 days
after the servicers determination of which other loss mitigation options, if any, it will offer. The
servicer has to assign the review to someone who was not involved in the initial decision and
must give you a response in writing within 30 days of your request.
If the servicer decides not to change the offer after the review, or makes you a new offer, youre
entitled to 14 days to accept that offer.
You may have protections against foreclosure.

A servicer may not start a foreclosure if youre less than 120 days behind on your payments. If you
send in a complete application after the 120-day mark, and foreclosure has started, you may still
have protections.
If youre more than 120 days late on your payments, your loan is already in foreclosure, and
youve sent in a complete application more than 37 days before the sale, then your servicer cant
start foreclosure until:
The servicer decides you dont qualify for any workout.
You reject the workout options the servicer offers you.
You make a workout agreement and then dont do what you promised to do in the
workout agreement (like making timely payments).
You have to respond quickly to the options your servicer offers. If your foreclosure date is close,
you may get only seven days to say yes to a loan workout.
10
Where to find out more

Information about these and other rules is available at http://consumerfinance.gov/regulations.
You can get more mortgage facts and help at http://consumerfinance.gov/mortgage. Looking for
a new mortgage? Take a look at the booklet, Shopping for a mortgage? What you can expect
under federal rules, posted on that page.
If you have a problem with your mortgage, you can also submit a complaint with the CFPB:
Online:
www.consumerfinance.gov/complaint
By telephone: (we provide services in more than 180 languages)

8 a.m. to 8 p.m. ET, MondayFriday:
(855) 411-CFPB (2372)
Espaol (855) 411-CFPB (2372)
TTY/TDD (855) 729-CFPB (2372)
By mail:
Consumer Financial Protection Bureau

P.O. Box 4503
Iowa City, Iowa 52244
By fax:
11
(855) 237-2392

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JANUARY 2014

Youve got support when you

Youll receive billing information in writing.

What you owe

How much money is applied to principal, interest, and escrow

HAVE A MORTGAGE? WHAT YOU CAN EXPECT

Other account information

The principal amount you currently owe on your loan

General contact information for your servicer

How to contact a housing counselor for help

If youre more than 45 days behind on your payments: Notice of delinquency

The date you became delinquent

Your account history for the past six months

How much to pay to bring your account current

Information about housing counseling

A notice whether the servicer has started the foreclosure process

HAVE A MORTGAGE? WHAT YOU CAN EXPECT

Your payments will be credited promptly.

Youll get a quick response when you ask about paying

You cant be charged for insurance you dont need, or

HAVE A MORTGAGE? WHAT YOU CAN EXPECT

Your complaints and information requests will be

Does not apply your payment correctly

Charges improper fees

Makes any error relating to the servicing of your mortgage loan

HAVE A MORTGAGE? WHAT YOU CAN EXPECT

Your servicer has to follow good customer service policies.

Access correct information about your loan

Tell you how to submit complaints and requests for information

If you have an adjustable-rate mortgage, youll have at least

An estimate of the new interest rate and payment amount

Alternatives available to you

How to contact a HUD-approved mortgage counselor

HAVE A MORTGAGE? WHAT YOU CAN EXPECT

You can get help if youre

Youll be contacted when youre having trouble making your

HAVE A MORTGAGE? WHAT YOU CAN EXPECT

You can apply for help, so do it promptly.

Youll find out your options.

Temporarily suspending or reducing your payments (a forbearance)

HAVE A MORTGAGE? WHAT YOU CAN EXPECT

You can seek review of the mortgage servicers decision

You may have protections against foreclosure.

The servicer decides you dont qualify for any workout.

You reject the workout options the servicer offers you.

HAVE A MORTGAGE? WHAT YOU CAN EXPECT

HAVE A MORTGAGE? WHAT YOU CAN EXPECT

Where to find out more

By telephone: (we provide services in more than 180 languages)

Consumer Financial Protection Bureau

HAVE A MORTGAGE? WHAT YOU CAN EXPECT

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