REAL ESTATE QUESTIONS
Q: We have lived in our house for 15 years. About four years ago our mortgage was sold to another loan service company. We called the new company several times over the course of a year and they told us they had no record of our loan. We had no way to repay our loans and now the property taxes have not been paid. We recently learned that our property taxes had been sold. If I pay the taxes, who owns the house?
A: It’s hard to believe it’s been four years since you made a mortgage payment on your home and couldn’t figure out how to at least pay property taxes. But let’s take your email as it is and start unpacking it.
We suspect that you may have more serious problems than just defaulting on your mortgage and property taxes. How catastrophic could it be: You could lose your home due to the tax sale or you could lose your home due to failure to make your mortgage payments.
Let’s start with the assumption that you initially had a 30-year loan on your home and the loan servicing problem arose about 11 years after the loan term began. We mention this because you maybe paid 10% or 20% when you bought your home and now, 11 years later, you’ve paid off a good chunk of the loan balance. This means that you should have some equity in your home.
For years we have told our readers that they should be careful when receiving notices that their loan service has been transferred by a lender or the loan has been sold to another loan buyer because that might not be true.
Identity theft these days is more than just buying your Social Security information online and opening a fake credit card in your name. It now includes medical identity theft (where someone obtains your insurance information and receives medical treatment on your behalf), bank fraud (where someone can empty a bank or brokerage account) and a quantity increasing real estate identity theft (where property can be bought, sold, financed and refinanced on your behalf, and you will never know your equity has been stripped).
If you receive a notification that your loan has been sold and you are notified that you need to make payments to another business, it is your responsibility as the borrower to confirm that the loan has been sold. You need to pick up the phone and call your current lender and ask them to confirm whether your loan has been sold or not. You also ask them to confirm who the new loan manager is for your loan. If you take this simple step, you can save a lot of pain down the road and make sure you’re paying the right loan manager.
Have you ever called your lender to confirm the transfer? Your current lender (the lender you had four or more years ago) would have the information to confirm that they sold the loan and could give you information about who the new loan manager is.
What we don’t know is if someone tried to rip you off. There are a lot of bad actors out there trying to trick homeowners into sending their mortgage payments to scam companies. The owner only finds out about the scam when the legitimate lender calls to find out why the borrower has not made the loan repayments.
Say your loan has been sold and the new lender has lost track of your loan. Even if this is the case, you can and should still make the tax payments on your loan. Most government agencies that charge homeowners property taxes send their tax bills to homeowners. They also send an electronic copy of the tax bill to the loan management company. When things are working properly, the loan manager receives the notice that taxes are due, and they pay the taxes on the funds that the owner has deposited with the lender in tax escrow.
There are times when loan officers mess up and fail to make real estate tax payments, pay the wrong tax bill, or pay the wrong amount. But you, the homeowner, have an obligation to keep an eye on your lender and make sure they make your property tax payments on time and in full.
These days, you can check your property tax bills online (in most jurisdictions) to see if they have been paid and if they are up to date.
Now suppose your loan file has been lost in some way. And your taxes may not be paid. So if your lender isn’t making your property tax payments, you better make sure you do. Otherwise, if those taxes are sold and you never redeem the tax sale, you will lose your home to the tax buyer. We suggest you go to the collector’s office and pay whatever is owed on your property’s property tax bill to buy back taxes and save your home.
Please make sure that you are dealing directly with the government office that handles property tax payments and not with a company that is trying to make money from you because of your particular situation (this is public information that your taxes have. been sold and who bought them). You have to pay your taxes in full and you should know that time is running out here or you could easily find yourself homeless.
We cannot delve into your other problem of a loan manager who lost your file. In other words, you should have all the money you should have paid your lender in the past four years. It’s entirely possible that the loan manager will check their records, find the error, and come after you for the money you owe them. If so, you had better have the cash on hand or you could end up in foreclosure. Save money and don’t spend it. You’ll have fines and penalties on your property taxes to pay, but you should have that money because you haven’t made any mortgage payments.
Please understand that just because the loan manager has “lost” your file so far, it doesn’t mean that this situation can’t come back to bite you when they see their mistake. Yes, we know the lender caused the problem, but it is difficult and costly to fight loan services even when they make the mistake. Keep good records of everything you do and every payment you make just in case you need them.
You should also immediately withdraw a copy of your credit report and score from each of the major credit bureaus: Equifax, Experian, and Transunion. All of them offer a free report and score these days, so head over to their websites for that information.
You should be able to see the lender registered for your loan and if they have reported any late payments to you in the past four years. You will also see the record of your missed tax payments, which should also be reported.
If someone has stolen your identity, you might see other credit accounts in your name that you don’t recognize. If so, you’d better get started as it could take years to unravel this mess.
Send your questions to Real-Estate Matters, 361 Park Ave., Suite 200, Glencoe, IL 60022, or contact author Ilyce Glink and attorney Samuel Tamkin at www.thinkglink.com.