Your Mortgage Records Can Save Your Home Equity

November 6, 2006

"I have accumulated monthly mortgage statements for 8 years, when is it safe to begin throwing them out?"

I would retain them all until the loan has been paid off.

Why? Marie McDonnell who audits mortgage loans when predatory behavior by servicers is suspected, related the following experience to me. Three years after her client’s mortgage had been originated, the servicing was sold to another firm, but the records of his account covering the first 3 years were not transferred to the new servicer. When the client with Marie’s help realized that he had been systematically gouged, the only available records for the first 3 years were those of the client. Had the client not kept the records, the skullduggery could not have been proved.

Mortgage servicers make mistakes, some of them deliberate, designed to increase the servicer’s income at the borrower’s expense. You don’t select the firm who services your mortgage, but even if you did, servicing can be sold without your permission. Under the law, you must be informed about such a sale but you can’t prevent it. The law should but does not require that when servicing is sold, the entire historical file be transferred to the new servicer. So keep your records, they just might save the equity in your home.

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