Mortgage Servicing Errors in Philadelphia

Foreclosure Defense That Examines How Your Loan Was Managed

Mortgage servicers handle payment processing, escrow accounts, and loss mitigation for millions of loans. At that volume, errors happen. An uncorrected misapplied payment or an improper fee can quietly compound, damaging your credit and, in some cases, contributing to a foreclosure that may not have been filed. If you’re facing foreclosure in Philadelphia or have noticed problems with your loan account, identifying whether a servicing error contributed is a separate and important line of inquiry.

I review whether your servicer followed all required notice provisions under Pennsylvania law and whether you were properly offered loss mitigation options before any lawsuit was filed. With over 35 years of legal experience representing homeowners against banks and mortgage servicers, I approach each case by examining the full loan history rather than just the foreclosure paperwork.

Mortgage servicing issues move on tight timelines. Call me at (610) 991-3321 to schedule a free consultation and find out whether errors in your loan account may affect your case.

Common Categories of Mortgage Servicing Errors

Servicing errors tend to fall into recognizable patterns. Understanding them can help clarify whether your servicer’s conduct contributed to your situation.

Misapplied Payments
A servicer may fail to credit your payment on the day it’s received, apply it to the wrong account, or hold funds in a suspense account rather than applying them to principal and interest. Each approach can create a false record of delinquency.

Escrow Account Mismanagement
Servicers collect funds each month to cover property taxes and homeowners insurance. When a servicer fails to actually make those payments, the result can be a tax lien or a lapse in coverage you didn’t know about.

Force-Placed Insurance
A servicer generally can’t obtain force-placed insurance unless there’s reason to believe your own coverage lapsed, and must provide written notice before doing so. Applying force-placed insurance without that basis, or when your coverage was current, is a recognized servicing violation.

Improper or Excessive Fees
Unwarranted property inspection charges, retroactive late fees, and other unexplained additions to your loan balance can distort the amount you actually owe and sometimes become the stated basis for a foreclosure.

Dual Tracking
Dual tracking occurs when a servicer continues to pursue foreclosure while simultaneously negotiating a loan modification with the borrower. Federal rules under Regulation X, which implements the Real Estate Settlement Procedures Act (RESPA), restrict this practice, and violations can be raised as a defense.

Inaccurate Credit Reporting
A servicing error doesn’t stay contained to the loan account. Payments that were properly made but not correctly credited can be reported as late or missed to credit bureaus, creating credit report inaccuracies that affect your ability to refinance or obtain other financing.

Pennsylvania’s Judicial Foreclosure Process & the Servicer’s Role

Pennsylvania foreclosure is a judicial process. The lender must file a lawsuit in court, and in the Philadelphia area, those cases are heard in the Philadelphia Court of Common Pleas or a surrounding county’s court. Under federal Regulation X, a servicer generally can’t initiate foreclosure until your loan is more than 120 days past due, which gives homeowners a window to pursue loss mitigation before a lawsuit is filed.

Before filing suit, lenders are generally required to send two notices by mail informing the borrower of their intent to begin foreclosure. Whether those notices were properly sent, and whether the servicer offered or completed a loss mitigation review beforehand, are questions I examine when evaluating a case.

How I Review a Case for Servicing Misconduct

When I take on a mortgage foreclosure matter, I look at the loan history, payment records, and every notice the homeowner received. I’m looking for dual tracking, misapplied payments, improper fees, and procedurally defective foreclosure paperwork. Lender and servicer misconduct doesn’t always announce itself in the complaint the bank files. It shows up in the account records.

That approach has produced results in Pennsylvania courts. I represented the homeowner in U.S. Bank, N.A. v. Pautenis, a Delaware County mortgage foreclosure action in which the court ruled in the homeowner’s favor and dismissed the bank’s complaint. That decision has since been cited in other Pennsylvania foreclosure rulings.

Don’t Wait to Find Out If a Servicing Error Is Affecting Your Case

Foreclosure situations move quickly, and acting early preserves more options. I offer a free consultation to Philadelphia homeowners who suspect a servicing error or who are already facing foreclosure and want their loan history reviewed.

Call (610) 991-3321 to reach Law Office of Michael P. Forbes, PC and schedule your free consultation.