Receiving a returned mortgage payment from a lender can be confusing. Most people would assume that a lender would graciously accept a payment on a loan even if the loan is delinquent. However, special rules apply depending on the circumstances of your loan. Reviewing your mortgage disclosure statements can help you learn common reasons why a mortgage company chooses to return a customer’s payment.
If your account is in bad standing, this may lead to a returned mortgage payment. Consider when you made your last payment. If it was months ago, your lender may have began the foreclosure process. Most lenders initiate the process with a demand letter by certified mail, but if you were not home to receive the letter, there are other ways to review your account standing. Review your mortgage statement and open all new mail from your lender. In most states, lenders are required to send written notice of legal action to homeowners.
Failed Payment Arrangements
Many lenders have strict rules regarding payment arrangements. If you made a commitment to a payment arrangement, but mailed in a payment late, the lender may decide not to honor your arrangement. The best way to determine the status of your payment arrangement once you break the rules is to contact the lender for alternative options. Ignoring the issue could lead to foreclosure.
Lenders can require that a delinquent account be brought current to avoid foreclosure. In this case, the total past due balance is due to keep your account in good standing. Attempts to mail partial payments are generally rejected. If this is the first time you fell behind on your payments, the lender may be willing to work with you on making payment arrangements.
Wrong Mailing Address
If your account is current, there is likely a simple error to your issue. Start with address verification. Some lenders, for example, J.P. Morgan Chase has divisions for credit cards, student loans, mortgages and banks. Attempting to pay your mortgage using a generic address found online can lead to your payment being sent to the wrong division. In this case, your payment will be returned. Review the address on your envelope against the address on your mortgage statement to confirm.