Has anyone successfully sued their loan servicer?

Question

One of my loans was taken over servicing by Shellpoint. Since then it's been a pita for the last 6-8 months. Essentially my taxes suddenly weren't being paid and they subsequently lowered my escrow payment. I initially found out because my county began sending me delinquent notices. After many attempts to explain this to Shellpoint they finally have readjusted the escrow payment to an even larger than initial amount.  I have been trying to explain this to them since January - it's taken them until June. I had sent them the delinquent notices from the county at least two times. My initial piti payment was 8,870 now it will be 10,359.To make matters more messy I changed insurance during this time - they repeatedly sent me notices that they did not have proof of insurance...I had my insurance rep send them the docs several times before they finally acknowledged the new insurance. I don't know if this is worth pursuing but I feel like they've really dropped the ball over and over. I'm guessing It's not worth it, but I would like to hear if anyone has ever sued a loan servicer and what they outcome was.

Chris Seveney · Answer

@Noah P Bonds

Qualified written response

Question would be what are you suing for? You can only sue for actual damages. What damages did you have? Maybe some extra money owed on taxes? So you are gonna sue and spend thousands to collect maybe a few hundred in penalties?

You won’t get money but if you file complaints they would get fined

Chris Seveney · Answer

@Noah P Bonds

I would not sue them - I would request a qwr, an escrow analysis and put in the request the history / story and copy your states department responsible for licensed servicers

If you give me the state I could give you their information. Along with copying them you could file a complaint with them as well.

Nicholas L. · Answer

@Noah P Bonds

I am sorry you're going through this, I went through something similar a couple years ago.  I tried to take my taxes out of escrow - I pay them myself on my primary, and ALL of my rentals - and it was a TOTAL NIGHTMARE.  I had to call them - not exaggerating - dozens of times, and then when they finally mailed me the check, it was the wrong amount.

So yes, my experience with loan servicers has been the same.  But no, you're not going to get anywhere 'suing' them.  You're just going to have to pester them until they get it right.  And you got great advice from @Chris Seveney.

Good luck!

James Mc Ree · Answer

I like paying my own TI as I know it is paid on time and I can collect interest on the escrow balance until it is paid out. That's 5.27% that I am getting right now as school taxes approach. I wouldn't be getting anything if the servicer held the balance.

JD Martin · Answer

If you have a track record and a decent amount of equity in the property most services will let you exclude TI from your payment. I pay my own taxes and insurance on my real estate loans. Generally all you have to do is ask.

JD Martin · Answer

Anyone lacking that discipline probably isn't an investor at all! Owning rental property requires discipline beyond taxes and insurance - your capital reserves should be well beyond just your cost of insurance and taxes.

Joe S. · Answer

I don’t have a lot of confidence that just anyone could put the money aside to pay their taxes and insurance yearly. If a person cannot afford to make their taxes and insurance payments on a monthly schedule, how would they have the personal discipline to set it aside for yearly lump payments?

Melanie P. · Answer

@Noah P Bonds You don't have any damages to sue over. The move here is if you're going to go that route sue them for $2,000 in small claims court for "improperly managing my account, #_______." You'll get a call from their lawyer once you serve it and they will be able to resolve your issues. For the cost of filing fees and service fees you get someone with the wherewithal, authority and motivation to fix your problem. You have no hope of any recovery and need to agree to dismiss the case. Don't go into court and look insane.

Noah P Bonds · Answer

Thanks for the reply. I've moved on at this point. The insurance issue was resolved, but only after the agent called them a few times. The impound issue began when they took over servicing. There was one loan that covered three tax parcels and they were only paying for one parcel. I think I've got that resolved at this point. I'm mostly just mad that it took so much of my time to get it sorted. Prob 20 hrs of the most aggravating phone calls explaining it to them over and over.

Ron S. · Answer

Its actually...Qualified Written Request but who's counting. :)

Has anyone successfully sued their loan servicer?

Most Popular Reply

Contact Us