Can A Mortgage Company Refuse Payment?

Issues with mortgage companies can be extremely stressful. Understandably, if you’re having issues making your mortgage payments, you will want to resolve it as quickly as possible.

If you’re having issues with your mortgage or your mortgage company, an experienced mortgage attorney may be able to work with you to help you resolve the issue.

Contact Denbeaux & Denbeaux Law today to discuss how we may be able to help you with mortgage issues.

Why Might a Mortgage Lender Refuse Payments?

A lender may refuse a mortgage payment for many reasons. It could be as simple as an error in their system. These are a few of the most common reasons that may lead to a lender rejecting a mortgage payment.

In Default

If you’re in default, meaning you’re behind on your mortgage payments, your lender can require that you pay the full amount you owe in order to be current on your mortgage.

For a mortgage that’s in default, your lender might not accept any partial payments that are less than the total amount you owe.

Partial Payments

Not all lenders will accept partial payments. It’s understandable that if you’re behind on your mortgage payments, you might start sending in your payments plus extra to start paying off your default amount.

If this payment is less than the full amount that you’re behind on your mortgage, these payments will be considered partial payments. A mortgage lender that doesn’t accept partial payments can reject these payments.

It’s important to note that even if your lender does accept partial payments, making partial payments toward your default amount doesn’t fix the fact that you’re in default until the whole amount has been paid.

Partial payments also likely won’t encourage your lender to stop or back off pursuing foreclosure against you. Even if your lender accepts partial payments, they can still move forward with foreclosure if you haven’t paid them the full amount, you’re in default, or you have been approved for a loan modification or repayment plan but are failing to make full payments.

Short Payments

Your lender could’ve added fees late fees to the total amount you owe. If you’re unaware of these fees and your payments are for less than they’re supposed to be, your lender could refuse your payment.

Service Release

Your loan being sold to a new servicer could be a reason for your payment being rejected. If your loan’s been sold and you’re paying your old loan servicer, they won’t accept your payments. When a mortgage lender sells your loan, your old and new lenders should notify you in writing with information about how to make your mortgage payments.

What To Do If Your Mortgage Payment Is Rejected

If your lender has refused your mortgage payment, the first thing you can do is double-check your payment. Make sure that you’ve followed your mortgage servicer’s instructions on how to submit your mortgage payment.

For a lender who doesn’t accept partial payments, exploring a loan modification or repayment plan might be your best option if you’re unable to pay the full amount you owe.

If you can repay the full amount you owe at once, it’s important that you go through the reinstatement process with your lender. If you were to send in a payment for the total amount of payments you’ve missed, you might not account for fees or other additional charges and create a missed payment issue.

For an up-to-date mortgage with payments that aren’t being accepted, an attorney can help advise you on the situation. Your best course of action may be to file a complaint with the Consumer Financial Protection Bureau. Your attorney can help you through this process. If you’re doing everything right and are being threatened with foreclosure even after you’ve made payments, contact a foreclosure attorney right away. Even though they’ve refused payment, they still may be able to foreclose if you don’t take action.

Be Weary of Missed Mortgage Payments

It’s important to always stay on top of your mortgage payments and make sure that they’re being accepted. If your mortgage company refuses your payments, even though you’ve sent the payments in, your mortgage is going unpaid.

Lenders are free to move forward with the foreclosure process when a mortgage isn’t being paid. Mortgage companies typically report missed payments to the credit bureaus after 30 days. If your mortgage payments are being refused and your mortgage is unknowingly going unpaid, your credit score could take a hit from a missed payment report or foreclosure filing.

Contact an Attorney

A lender refusing mortgage payments should not be ignored or taken lightly. If the issue with payments is not resolved quickly, it could have significant consequences for the homeowner.