Chicago Loan Servicing Error Lawyers

Advocating for Homeowners Against Mortgage Companies in Illinois

Large mortgage companies often make errors when servicing homeowners’ mortgages, including errors related to the payment of taxes and insurance, calculating escrow payments, and handling the mortgage after a Chapter 7 or 13 bankruptcy. They also sometimes impose unfair fees and charges that may not be authorized by your mortgage contract. Finally, they also sometimes make errors relating to loan modifications. Modifying a mortgage loan is a complex process that is often made more difficult by mortgage companies making errors in implementing the modification. At Edelman Combs Latturner & Goodwin, LLC, we have helped many clients who have experienced hardships due to errors by their mortgage companies.

We have sued numerous large mortgage companies on behalf of homeowners who have suffered from mortgage servicing and loan modification nightmares, including:

• Mortgage companies claiming not to have received documents the homeowner sent them
• Improperly denying loan modifications
• Suddenly refusing to honor a loan modification that has been approved
• Improperly crediting payments and damaging consumers’ credit scores during the loan modification process
• Failing to pay taxes and insurance on time from the escrow account
• Improperly increasing escrow payments and otherwise mishandling the escrow account
• Claiming the borrower owes additional money after successful completion of a Chapter 13 plan
• Adding improper fees to the mortgage balance

If you have found yourself in any of these situations, the Chicago consumer protection attorneys at Edelman Combs Latturner & Goodwin, LLC are here to help. Our team can assess your situation and take the appropriate legal action to see that your rights are protected. Click here to learn more about our attorneys.

Common Loan Servicing Problems Faced By Chicago Homeowners

Homeowners in the Chicago area frequently contact us after months or even years of confusion about how their mortgage has been handled. Many first notice a problem when their monthly statement suddenly increases, or when they receive a notice from the Cook County Treasurer that property taxes are past due despite having an escrow account. Others learn about issues only after a new servicer takes over the loan and claims that prior payments were missing or misapplied.

These situations may be the result of loan servicing errors such as incorrect interest rate adjustments, failure to honor prior agreements, or misinterpretation of the terms of a confirmed Chapter 13 plan. A servicer might also treat a loan as delinquent after a transfer from another company, even though the borrower has kept up with payments. We analyze the history of a mortgage from origination through any transfers of servicing to identify where the accounting or treatment of the loan went wrong.

Servicing issues can be particularly challenging when a homeowner has previously obtained a loan modification or forbearance agreement. If a servicer fails to properly implement those terms, the homeowner may be charged late fees or labeled in default even while making the agreed-upon payments. At Edelman Combs Latturner & Goodwin LLP, our loan servicing error attorneys have worked with many Chicago families in this situation, reviewing trial payment plans, permanent modification documents, and payment records to determine whether the servicer’s position is supported by the documents or reflects an unlawful practice.

Your Rights Under Federal And Illinois Mortgage Servicing Laws

Borrowers dealing with loan servicing errors and disputes often feel that they have no leverage against a large financial institution, but federal and state laws give homeowners important protections. Under federal mortgage servicing regulations and the Real Estate Settlement Procedures Act (REPA), homeowners can send written requests for information and notices of error, and require servicers to investigate and correct inaccuracies within specific timeframes. 

These protections apply to many residential mortgages in Chicago and throughout Illinois, including situations involving misapplied payments, escrow miscalculations, and wrongful default notices. When a mortgage servicer fails to properly respond to a notice of error or continues inaccurate reporting, it may be held legally accountable for the harm caused.

Illinois law, including the Illinois Consumer Fraud and Deceptive Business Practices Act, can provide additional remedies when a servicer engages in unfair or deceptive conduct. For example, misrepresenting the status of a modification application, charging fees that are not authorized by the mortgage documents, or threatening foreclosure without a factual basis may all raise legal concerns. We consider how federal and Illinois laws interact in a particular case and whether a homeowner may have claims in the United States District Court for the Northern District of Illinois or in the Circuit Court of Cook County.

Homeowners are not expected to know which statutes apply to their situation, but it is helpful to understand that strict deadlines can govern some rights. For instance, there may be limited periods for challenging certain charges or for contesting information reported to credit bureaus in connection with servicing disputes. During a consultation, an experienced loan servicing error lawyer can explain how these timelines work, what documents are most important to preserve, and how formal written disputes can help create a record of the servicer’s conduct if litigation becomes necessary.

Our Process For Evaluating Loan Servicing Error Cases

When someone contacts us about possible loan servicing errors, we follow a structured process designed to uncover the full scope of the problem. We start by asking the homeowner to describe, in their own words, how the issue developed and what they have been told by the mortgage company. We then review key documents such as monthly statements, default notices, escrow analyses, correspondence, and any loss mitigation or bankruptcy papers to build a timeline of events.

After we have a clear picture of the history of the loan, we compare the servicer’s actions to the terms of the mortgage documents and to applicable federal and Illinois servicing rules. This may involve checking whether payments were applied as required, whether escrow calculations were performed correctly, or whether the company followed mandated procedures before starting foreclosure in Cook County or another Illinois county. Where necessary, we may request additional records from the servicer so we can verify how the account has been handled behind the scenes.

Once our review is complete, we discuss our findings with the homeowner and outline potential next steps. Those options might include sending formal written disputes, negotiating with the servicer to correct the account, or filing an individual lawsuit or class action if the conduct appears widespread. Throughout this process, we draw on decades of consumer protection experience, including extensive work against major mortgage companies, to help clients make informed decisions about how to address problems with their loans.

Contact Our Loan Servicing Error Attorneys in Chicago Now

If you have been the victim of unfair practices while trying to obtain a loan modification from your mortgage company, you have rights. At Edelman Combs Latturner & Goodwin, LLC, we want to help you seek justice and obtain the modifications you are entitled to. Our Chicago loan servicing error attorneys look forward to discussing your case during a free initial consultation. Click here to view our case results.

During an initial consultation, we typically review key documents such as your mortgage, recent statements, correspondence with the servicer, and any court papers if foreclosure has been filed. This allows us to identify potential violations, assess the strength of possible claims, and discuss realistic paths forward. Depending on the facts, those options may include pursuing individual litigation, exploring the possibility of a consumer class action, or using dispute procedures to correct inaccurate information reported to credit bureaus.

Because loan servicing disputes often arise during periods of financial stress, we know that clients are concerned about legal costs and timing. We explain how fee arrangements work in these cases, the stages of a typical lawsuit in Illinois courts, and what homeowners can expect at each step. Our goal is to give you enough information to decide whether legal action makes sense for your situation and to help you feel more prepared before taking that step.

Informative Articles and Resources

• Failure of Bank to Honor Loan Modification