Loan Servicers Cannot Change Loan Terms

If you’ve been dealing with your loan servicer and not your lender, you’ve been talking to the wrong people. A recent CNN article, published today, discusses the story of Yolanda Cruz. Cruz had been negotiating with America’s Servicing Company (ASC) about getting current on her loan when she was told a $3,000 payment could catch her back up. She mailed the check and then ASC said it was for the wrong amount and “mailed it back.” Well the check got lost and cashed, she was out $3,000 and not in any better a position. All this only to find out that, according to Erin Kemple, the Connecticut Fair Housing Center’s Executive Director, that “the servicer doesn’t have the power to renegotiate a loan … because they don’t actually own the loan [they can't] make changes to the payment plan.”

Lessons Learned:

• Loan servicers can’t renegotiate your loan.
• Get everything in writing.
• If a check is being returned by regular mail, put a stop payment on it.