Mortgage payment audit advice

March 8, 2012 4:09 PM

How can I find out whether or not my mortgage company is ripping me off? I thought about something like a "forensic audit" but I see via Google that that is the hot new scam, and I don't want to be taken for a ride (twice). I am not looking to modify my loan or get out of my mortgage, I just want to make sure that my payments (for which I pretty much always pay extra) are being applied correctly.

My loan got sold nearly two years ago to what I consider an unscrupulous servicer (Seterus) and I think they are playing games with how and when they are applying my overpayments. Additionally, something weird has been up with my escrow account since the beginning of this year. Unfortunately, I am not financially-minded, and that coupled with the fact that they provide only the bare minimum of information on your loan, payments, and balance make it very difficult for me to calculate what I think should be happening with my payments (before Seterus I dealt with Chase, and while they were also a step down from the prior owner of my loan, they were a veritable powerhouse of data compared to these guys). Should I hire a CPA? A lawyer? Some special kind of lawyer? My house and I are located in Georgia, if that makes a difference. Any advice or recommendations much appreciated.

posted by Hal Mumkin to work & money (7 answers total)

I think we need more information. Why can you not look at each monthly statement and figure out whether last month's principal + interest payment was applied correctly? That should be fairly straightforward, if you're capable of calculating the interest that accrues each month.

Can you clarify what data they give you and what is looking questionable to you? What are you having trouble figuring? Perhaps with some hard numbers we can look at?
posted by jayder at 4:14 PM on March 8, 2012

Seriously you don't need a lawyer. You need excel, and if the numbers don't match up then you need a lawyer.
posted by JPD at 4:16 PM on March 8, 2012 [4 favorites]

I am a Florida foreclosure lawyer. I am not your lawyer. This is not legal advice.

Many of my clients come to me only after getting a "forensice audit" and I've never once found them useful. There are maybe two people I'd allow my clients to consider, and one of those isn't accepting new cases.

But you don't need a forensic audit, anyway. You need an accountant. If your CPA can't tell you whether your escrow makes sense, then probably no one can.
posted by mikewas at 4:46 PM on March 8, 2012 [2 favorites]

I agree with JPD: you need a friend who is good with Excel. It really shouldn't be any more complicated than adding up a few columns of numbers.
posted by alms at 5:22 PM on March 8, 2012

I am going through this process right now.

My loan was sold a few times and I ended up, even though I had never missed a payment in 20 years, with what is essentially a debt collector trying to force me out. My contract was changed and I ended up with a ton of unexpected late fees.

Here's what you need. A detailed payment history from the mortgage co. (Call and ask for it. It should include how each payment was divided between P&I, escrow, late payments etc.)
Your property tax bill and a bill from your home insurance co. See if you can find your original signing papers/contract too.

With that stuff in hand you should be able to figure out if you're being scammed or not. You'll need this stuff anyway if you get professional help.

(On preview, add this to what JPD says about excel.)

If they changed any of the details of your contract, like the payment date when a late fee will be incurred, hire an attorney if you can afford it. I wish I could.

Good luck!
posted by snsranch at 5:37 PM on March 8, 2012

You might find this information helpful. RESPA is a law that governs consumer mortgages including the escrow component. I am not a lawyer and not an accountant, but I was required to read up on this as part of a project I was involved with. I found it to be dull as anything, but if you take your time I think it is comprehensible. For instance, they may talk about 1/6th of projected disbursements, and other times talk about 2 months (which is one sixth of a year if we assume monthly payments). There are differences between shortages (where you are coming too close to zero on your escrow balance, they are allowed to maintain a cushion) and deficiencies, where you actually went negative. There are different procedures for the closing disclosure than for the periodic escrow account analysis. And so on.
Just FYI.
posted by forthright at 5:57 PM on March 8, 2012 [1 favorite]

We also have three loans (investment properties) sold to Seterus and man, do they suck. However, I'm looking at my monthly account statement and it does show YTD principal paid and current principal balance, along with an escrow breakdown. Is there something else you need specifically that's not shown on your monthly statement?
posted by raisingsand at 6:40 PM on March 8, 2012 [1 favorite]