ASSUME FOR a moment that you're like 300,000-plus other American families. You bought a new or existing home and closed on your mortgage sometime in the Past month.
Congratulations on your new loan. You're part of the record 67.2 percent of American households who now own their own home. But ask yourself as a new - or repeat - mortgage borrower: Do you really know your federally guaranteed legal rights vis-a-vis your lender?
Did you know that if you complain to your mortgage company in any manner other than prescribed by federal law, you could lose some important federal consumer protections?
And do you know how much time your lender or loan servicer has to get back to you, and then solve your problem?
If these questions are drawing blanks, join the crowd. Federal officials familiar with mortgage borrower protections say only a tiny fraction of consumers have a grasp of their legal rights when disputes arise. To make certain you've got the facts when you need them, here's a quick overview:
Complaints must be written: If you have a serious problem with your lender or servicer's handling of your loan, you need to describe it in writing - not simply over the telephone. You need to send your written request, along with your loan account number, to the complaint address provided to you by law by your lender at least once a year. Your letter should be separate from your monthly payment or other correspondence.
Two deadlines: Provided you have sent your complaint in this form, your lender is covered by key legal deadlines. Within 20 business days of receipt, your lender must respond to you, at least acknowledging receipt of the letter and promising action. Within 60 business days, your lender must "correct or clarify" the problem itself.
Escrow accounts: The most common source of friction between homeowners and mortgage lenders is escrow accounts. Say, for instance, you question the way your escrow items have been calculated by the lender. You can telephone the lender's customer service number to talk about it. But if you don't like the answer you get - or you get no action or resolution - the only way to ensure coverage under the federal 20/60-day consumer protection rules is for you to send a formal written request, including your account number.
Overdue payments: If your argument with the lender or servicer involves an allegation of unpaid or overdue funds, invoking the 20/60-day rule can give you an added blanket of protection: During the 60-business-day period beginning with the lender's receipt of your "qualified written request," the company is prohibited by federal law from informing credit bureaus about your alleged nonpayment. If you're not covered by the rule, on the other hand, your lender is free to tell the national credit bureaus - and through them, anyone checking on your credit - that you're delinquent on your mortgage payments. Even if it turns out later that you weren't.
Notice of loan transfer: This is another constant source of friction between lenders and their customers. Lenders frequently sell or transfer the rights to service your loan to other mortgage companies. But you are protected by federal law against surprise transfers or sales of your loan files and account. You are entitled to advance, written notice of any transfer. Your lender, in other words, cannot simply write or call you tomorrow and say, "We sold your mortgage to Tasmania Mortgage.com last week. Send all your future payments to Tasmania from now on, not to us. Have a good day."
No way. You must receive formal, federally prescribed notifications in writing from both your current lender and the new firm that will be handling the mortgage. The latest date you as a homeowner can be informed of a servicing transfer is 15 days before the date that the successor firm is scheduled to take over administration of the loan. The advance notification must give you the name, address and toll-free phone number for servicing information at the new firm.
No later than 15 days after the transfer occurs, the new servicer must contact you in writing and establish procedures for the new relationship. But here's a key consumer protection you've got: During the initial 60 days after your loan servicing account has been transferred, you may not be hit with late penalties for any mortgage payment you send on time to the first servicer, rather than to the new firm. You are held harmless for the innocent mistake of being confused about where to send your payment.
Of course, if your mistake is not innocent, and you sent your payment in late to the wrong place, don't look to federal law to protect you from lender penalties. You owe the money, 60-day rule or no.
Kenneth R. Harney is a syndicated columnist. Send letters care of the Washington Post Writers Group, 1150 15th St. N.W. Washington D.C. 20071.