This story is a classic example of a "mugging" by a mortgage company. The Huffington Post reported an awful story about a couple facing foreclosure on their home even though they didn't miss a payment.
Yes, you read that correctly. The mortgage company wants to foreclose even though the homeowners didn't msiss a payment. And the homeowners can prove they didn't miss a payment.
How did this situation happen? According to the Huffington Post story:
"...the neighborhood bank that originally issued their mortgage sold the loan, and it eventually landed in the hands of one of the nation's largest mortgage companies... The complex reality of the modern mortgage system was supposed to have very little effect on the Parkers -- they would simply mail their monthly payment to a mortgage servicer... But, along the way, that machinery broke down. No one, the Parkers say, told them their loan had been sold. With no word from the new servicer, New Jersey-based PHH Mortgage, the Parkers sent their first payment to the original bank, which mailed the check to PHH, according according to documents the Parkers provided to The Huffington Post. But that check went missing..."
How does a mortgage company mishandle a payment? After all, collecting mortgage payments seems like a primary corporate task.
The Parkers did everything correct. They kept documentation. They kept submitting mortgage payments. They called PHH to find out what happened. They also sent payments directly to PHH. They sent registered letters to PHH customer service representatives. They spent hours on the phone with the bank and the mortgage servicer. They even contacted both the CEO of PHH and their state attorney general's office for help.
You'd think that PHH would want to quickly correct the problem, since they want to continue receiving payments from a willing and financially-able homeowner. The Parkers worked with the local bank to correct the problem at PHH. They hired an attorney to help them communicate messages and payments properly given the foreclosure threat:
"It appears Metropolitan National Bank forwarded proof that that original payment had been sent to PHH Mortgage, and asked the Parkers for proof they'd made all the subsequent payments, which they forwarded to PHH Mortgage... In November, 90 days after that first payment had gone missing, the PHH Mortgage refused the fourth payment, returning the check with a letter that explained the account was in arrears..."
I guess that bureaucracy and incompetence got in the way at PHH. PHH sent the house into foreclosure on December 29.
Consumers lose their home after one mishandled payment by a mortgage company? That is not right, on so many levels. Where is the honesty? The corporate responsibility?
I checked the Better Business Bureau website to see it's rating of PHH. While the BBB listed PHH as B+, there are 362 complaints about the mortgage company. 33 percent (120) of those complaints were for billing and collections issues, and 35 percent (128) were for contract issues. While 93 percent (336) of complaints were resolved, consumers still had to experience the hassle of getting their complaint resolved. It seems thtat the Parkers' experience with PHH is one of the unresolved.
I wonder how frequently this crap happens. A company mishandles checks and paperwork; and the consumer suffers the consequences. Where is the executive and corporate accountability? This kind of crap will stop only when bank and mortgage executives go to prison for this type of consumer abuse.