According to the Federal Trade Commission, the mortgage company servicing your loan is responsible for the day-to-day management of your loan. That management includes accepting and properly crediting payments to your account. When the mortgage company refuses to accept your payment, the consequences can be devastating. It's important to determine the reason your payments are being turned away so you can resolve the issue.
TL;DR (Too Long; Didn't Read)
If a mortgage company refuses your payments, your mortgage obligation is delinquent, foreclosure may begin and your credit score could take a hit.
Consequences of Refusing Payments
If your mortgage company refuses your payments, your mortgage is going unpaid. Depending on your state laws, the foreclosure process may begin after just a single missed payment. Not only can the lender foreclose, but your credit score will also suffer.
Mortgage companies will typically begin reporting missed payments to the credit bureaus after 30 days. Since payment history accounts for 35 percent of your FICO score, a late payment can wreak havoc on your score.
Sending a Qualified Written Request
Double-check to make sure you followed the instructions for submitting your mortgage payment. Verify the account number, mailing address and other account information. If you're attempting to send a partial payment, the lender can reject it if partial payments aren't accepted.
Once you rule out any possible errors, send the lender a Qualified Written Request asking for an explanation and initiating a complaint. The lender must try to resolve the issue within 60 days of receiving your request. During this period, your credit is protected. The lender can't report the unpaid mortgage until the issue is resolved.
Filing a Complaint
If you aren't delinquent on the loan and your lender is refusing your payment, file a complaint with the Consumer Financial Protection Bureau. You can submit the complaint online or over the phone. Provide detailed information about what exactly happened, and be as specific as you can to help the bureau understand your situation.
Include dates and the response from the lender when you attempted to make your payment. Indicate your desired resolution. The mortgage company receives a notice of your complaint and has 15 days to respond.
Possible Explanation for Refusal
Mortgage loans and the rights to service them are bought and sold. If your mortgage company rejects a payment, the loan may have been sold to another lender. Legally, your lender is required to notify you in writing at least 15 days before another servicer takes over your account. The letter should state the name of the new company, the mailing address, the phone number and the name of a person you can contact with questions.
The company purchasing your loan is also expected to mail a similar letter with contact and payment information. If you haven't received any letters from a new servicer, you should contact your current mortgage company to request clarification.
Jeannine Mancini, a Florida native, has been writing business and personal finance articles since 2003. Her articles have been published in the Florida Today and Orlando Sentinel. She earned a Bachelor of Science in Interdisciplinary Studies from the University of Central Florida.