Question:

What is a mortgage servicing fraud?

Answer:

Mortgage servicing fraud is on when it takes place in the daily lending operational activities. Often, mortgage servicing is sold to independent third party companies and is difficult to control. Mortgage servicing fraud can happen while collecting and crediting mortgage payments, sending reminders for due payments, calculating late charges, etc.

To start a mortgage servicing fraud, it is enough to mistake names and account numbers on the mortgage payments. There can also be internally forwarded mortgage payments and false late fees may be incurred.

If erroneous information is sent to the credit report companies, this is a case of mortgage fraud. Also, as a result of a loan servicing fraud you may begin receiving foreclosure notices when you are making all your mortgage payments on time.

That is why you have to follow on what is written on your credit report, as a mortgage servicing fraud may be difficult to spot in the beginning, especially if you are not monitoring your credit report.

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