After settlement, federal law requires that you be given disclosures concerning the servicing of your loan and any escrow account and that you receive a written mortgage statement each billing cycle.
You also have certain protections in regard to the timely payment of your taxes and insurance.
Servicing and escrow disclosure statements
The company that collects your mortgage payments is your loan servicer. This could be a different company than your lender such as Choice Lending Corp of Rancho Cucamonga. When you apply for your loan or within three business days, RESPA requires that your lender or mortgage broker tell you in writing whether someone else may be servicing your loan.
After your settlement, if your loan servicer transfers the servicing of your loan to a new servicer, RESPA requires that you be notified in writing at least 15 days before the transfer in most cases. The notice must tell you when the transfer is effective and when you will begin making payments to the new servicer. The notice letter must also give you the contact information for the new servicer as well as other important information about the servicing of your loan.
If your loan requires an escrow account, the servicer of your loan must give you an initial escrow account statement at your settlement or within the following 45 days. That form will show all of the payments that are expected to be deposited into your escrow account and all of the disbursements that are expected to be paid from the escrow account during the year.
Your servicer will review your escrow account annually and send you a disclosure each year that shows the prior year’s activity and any adjustments necessary in the escrow payments that need to be made in the upcoming year. You will not receive this yearly disclosure if your loan is more than 30 days overdue. Remember that your monthly payment can increase if your taxes or insurance payments increase.
Your monthly bill
What you owe on the current bill, and how much, if any, will be applied to principal, interest, and escrow. If your mortgage loan has multiple payment options, the statement must show whether the principal balance will increase, decrease, or stay the same for each option listed. The amount of any late payment fee and the date you must make the current payment to avoid the fee.
Your past payments and activity
How your total payments received since the last statement and since the beginning of the year were applied. Transaction activity, including the amount and date of any charge or credit that affects your current bill. Information on any payments that you made that were less than the full amount owed (known as “partial payments”) and what must be done for the funds to be applied to your loan balance.
Other account information
The amount of principal you currently owe. Your current interest rate, and if your interest rate may change, the next date it is scheduled to change. Any “prepayment penalty” that may be charged if you pay off your loan early. General contact information for your servicer. The designated address, if the servicer has established one, for mailing written requests for information about your loan or to report an error that your servicer has made. How to contact a housing counselor for help.
If you are more than 45 days behind on your payments, you will be informed of certain delinquency information. This includes:
The date you became delinquent.
Your account history for the past six months or the period since the last time your account was current, whichever is shorter.
How much to pay to bring your account current.
The possible risks and costs you could face, such as foreclosure, if you do not bring your payments up to date.
Information about housing counseling.
Information about any options to avoid foreclosure that you have agreed to, if applicable.
A notice whether the servicer has started the foreclosure process.
If you have a fixed-rate loan, in place of monthly statements your servicer may provide 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 including the notice of delinquency information.
If you are ready to talk about what you can afford and what type of loans will fit your needs Choice Lending Corp of Rancho Cucamonga can help you explore all the options. Call a lender or mortgage broker today at (877) 777-1203.