Mortgage Servicing and Loan Modifications: 1.4.2 Errors and Abuses During the Life of a Mortgage Loan
Servicing errors and abuses can occur at any time during the life of the loan including before default. Many times, pre-default abuses such as the misapplication of payments or improper force-placed insurance, if not corrected by the servicer, can lead the borrower down the path to default. While these abuses may be common before default, they can occur at any time. As a result, advocates are encouraged to engage in a rolling analysis of the potential errors and abuses regardless of the borrower’s exact situation.