How to Address Discrepancies in Loan Payoff Amounts?

Question from eric, How to Address Discrepancies in Loan Payoff Amounts?

Answer from AI:

If you find yourself in a situation where a collection company or lender has taken more money than agreed upon during the sale of your home, it’s important to understand your rights and the steps you can take to resolve the issue. Here’s a general guide on how to proceed:

Steps to Address the Issue

1. Request Documentation: Since you have already requested an itemized list and have been refused, document all your communications with the collection company. Keep copies of emails, letters, and any other correspondence.
2. Review Your Loan Agreement: Carefully review your original loan agreement and any payoff statements you received. This will help you understand the terms and any fees that may have been included.
3. Contact the Lender: Reach out to the lender directly to request an explanation of the additional $20,000 charge. It’s possible that there are legitimate fees or penalties, but they should be clearly explained to you.
4. File a Complaint: If the lender or collection company continues to refuse to provide an itemized list, you can file a complaint with the Consumer Financial Protection Bureau (CFPB). The CFPB oversees financial institutions and can help mediate disputes. You can file a complaint online through the CFPB’s complaint portal.
5. Consult a Legal Professional: Given the complexity of real estate and loan agreements, it may be beneficial to consult with a real estate attorney or a consumer rights lawyer. They can provide personalized advice and help you understand your legal options.

Who Regulates Banks and Collection Companies?

• Consumer Financial Protection Bureau (CFPB): The CFPB is a federal agency that oversees financial products and services, including mortgages and debt collection practices.
• Federal Trade Commission (FTC): The FTC enforces laws against deceptive and unfair business practices, including those related to debt collection.
• State Agencies: In Kentucky, the Department of Financial Institutions regulates state-chartered banks and can be a resource for state-specific issues.

Legal Considerations

– Fair Debt Collection Practices Act (FDCPA): This federal law protects consumers from abusive debt collection practices. It requires debt collectors to provide validation of the debt upon request.
– Real Estate Settlement Procedures Act (RESPA): This law requires lenders to provide borrowers with disclosures about the costs of the mortgage settlement process.

If you believe your rights under these laws have been violated, it may be necessary to seek legal advice. A lawyer can help you determine if you have a case and what steps to take next.

When to Seek Legal Advice

If the issue remains unresolved after following the above steps, or if you feel overwhelmed by the process, it is advisable to consult with a legal professional. They can provide guidance tailored to your specific situation and help you navigate the complexities of real estate and debt collection laws.

For more information on your rights and options, you can visit the Consumer Financial Protection Bureau website.