Seeing a mortgage statement that claims you missed payments you know you made can feel surreal. One minute you’re carefully budgeting, paying on time, and doing everything right. The next minute, your servicer is reporting late payments, your account balance looks wrong, and your credit score may be taking a hit. Unfortunately, this is not a rare problem, and for many homeowners, it raises serious consumer protection concerns. Mortgage servicing errors can happen quietly and quickly. If they’re not challenged, they can snowball into fees, default notices, and even foreclosure threats. If you’ve discovered that your mortgage servicer has reported your on-time payments as missed, read on and reach out to the New Mexico mortgage service fraud lawyers here at Feferman, Warren & Mattison to learn how we can help.
Why would a mortgage servicer misreport an on-time payment?
Mortgage servicers handle thousands of accounts, and mistakes do occur. Some errors are clerical. Others point to deeper servicing problems that may violate consumer protection laws. Some of the most common reasons that on-time payments get marked as missed are as follows:
- Payments applied to the wrong account or loan number
- Payments credited to suspense accounts instead of the principal and interest
- Processing delays caused by staffing or system changes
- Misapplied payments after a loan transfer to a new servicer
- Incorrect escrow calculations affecting monthly totals
In some cases, the payment was received on time, but the servicer applied it after the cutoff date without justification. In others, the servicer may have failed to properly credit partial payments, even though those payments should have been applied under federal servicing rules.
How can a servicing error affect my credit and financial stability?
When a servicer reports missed payments, the consequences can be immediate and severe. Credit reporting agencies rely on the information provided by services, even when that information is wrong. A single reporting error may lead to:
- A drop in your credit score
- Higher interest rates on future loans
- Difficulty refinancing or selling your home
- Late fees and added interest charges
- Default or foreclosure notices based on false data
These issues often appear without warning. Many homeowners only discover the problem after being denied credit or receiving alarming mail from their lender. Once inaccurate reporting begins, it can continue month after month unless it is formally disputed.
What should I do if my mortgage servicer is reporting payments incorrectly?
You need to act quickly. If you can, you should try and take the following steps:
- Gather proof of payment, such as bank statements and confirmations
- Review your mortgage statements line by line
- Send a written dispute or qualified written request to the servicer
- Monitor your credit reports for related errors
- Speak with a New Mexico consumer lawyer before the problem escalates
Mortgage services are required to investigate disputes and correct verified errors. When they fail to do so, they may be violating laws like the Real Estate Settlement Procedures Act and the Fair Credit Reporting Act. The team here at Feferman, Warren & Mattison can step in to force compliance, stop improper reporting, and help recover damages on your behalf. Contact us today.
