Frequently Asked Questions
2. What is included in my mortgage payment?
3. Can I make my escrow payments myself?
4. What is an escrow analysis?
5. What is an escrow adjustment?
6. Is my principal balance the same as my payoff amount?
7. Can I have my payments automatically deducted from my share draft (checking) account?
8. What is a "prepayment"?
9. What is an "assumption"?
10. What types of insurance are required?
11. How often will I receive a Statement on my mortgage/escrow account?
12. Will my loan be serviced by you until I pay it off?
13. How will I know if my servicer changes?
14. What if there's confusion and my payment doesn't arrive on time to the new servicer?
15. What if my servicer makes a mistake on my account?
16. What if I still have a complaint after the inquiry process has been completed?
17. How can I contact MMS's Servicing Department?
Servicing is the process of collecting mortgage payments, calculating the principal and interest and the allocating escrow contributions for the payment of periodic property taxes and insurances. Your servicing department is also responsible to report to you annually, as well as to appropriate governmental agencies, and to perform a periodic escrow analysis to assure accuracy.
Your payment consists of principal, interest, property taxes, and insurance. It may also include a premium for Private Mortgage Insurance (PMI - See 10, below).
In some cases, if the conditions of your Mortgage or Deed of Trust permit it.
A detailed annual analysis of your escrow account to assure that what your servicer is collecting is within legal tolerances of the amounts required to pay your annual property taxes, insurances, and any other items that may be included in your escrow as a condition of your loan.
In estimating an escrow account, and the amount you need to pay monthly to assure the timely payment of property taxes and insurances, an overcollection or an undercollection may sometimes occur, due to changes in tax rates or insurance premiums. When there is a surplus after obligations are paid, it is refunded to you, assuming your loan is current. When funds have been undercollected, a shortage occurs. Your monthly payment is increased to include the escrow amount and 1/12th of the shortage. You are also offered the option of paying off the shortage in a lump sum.
No. The interest on your loan is calculated in arrears. For example, when you pay your September payment, you are paying the interest that was due for August and the principal that was due for September.
MMS provides Electronic Payment Service which allows you to arrange for your credit union, or other accounts, to be debited monthly for the amount of your payment, or even additional amounts you wish to prepay on your loan.
A prepayment is the payment of all or part of your principal balance before it is due. This practice can reduce the amount of interest that you will pay over the life of your loan, and quickly reduce the duration of your loan, as well. However, some loan agreements may impose a special fee or penalty for early payment, usually within the first few years of the loan term.
An assumption is the transfer of property ownership to someone else, along with the ongoing responsibility for the debt still remaining on the property. Most modern loan agreements prohibit this practice.
Homeowners' insurance is required on all financed properties to protect the lender against loss by damage to the property. Coverage amounts are reviewed annually to assure that adequate coverage is in force. If you have purchased your property with less than 20% down, you may also be required to purchase Private Mortgage Insurance. Private Mortgage Insurance protects the lender against loss when the borrower does not have sufficient equity or down payment to otherwise qualify for a conventional loan. While it may represent an additional expense, it also helps many people secure loans at the most competitive rates who might otherwise have no choice but to take a much higher interest rate for the life of their loan.
MMS mails your annual statement no later than January 31 of each year to our address of record for the primary borrower.
Usually, however, it is common in the mortgage industry for servicing rights to be bought and sold between servicers. MMS's practice has been to retain servicing whenever possible, but circumstances could arise that could cause such portfolio adjustments to be made.
Your current servicer is required to notify you at least fifteen days before the effective date of a transfer of servicing rights (the effective date is the first date that a payment is due at the new servicer's address). Also, the new servicer is required to notify you not more than fifteen days after the transfer has occurred.
The notices must include:
- The name and address of the new servicer.
- The date the current servicer will stop accepting payments, and the date the new servicer will begin to accept them
- Free or collect call phone numbers for both the current servicer and the new servicer that can be called for information regarding the transfer.
- Information on whether you can continue optional insurances, such as credit life and disability, and what action, if any, you must take to continue coverage, along with any changes in terms of such insurance.
- A statement that the transfer will not affect any terms or conditions of the original contract you signed, other than terms directly relating to the servicing of the loan.
Return to top
A mandatory sixty-day grace period is imposed during which you may not be charged a late fee, or your loan reported as delinquent to credit reporting agencies.
If you believe that an improper penalty or late fee has been charged, or if there are other problems with the servicing of your loan, contact your servicer in writing. While MMS attempts to respond quickly and fairly to telephone inquiries, your legal rights can only be assured if you inquire in writing. Within 20 days of receipt of your inquiry, your servicer is required to acknowledge your inquiry. Within sixty business days, the servicer is required to either correct its error, or make a determination that no error has occurred. A written notice is required to be sent to you informing you of what action has been taken, and why.
If you believe that your servicer has not responded appropriately to your written inquiry, you can contact your local Better Business Bureau, or other consumer protection agency. You may also contact the Department of Housing and Urban Development (HUD) to file a complaint under the National Affordable Housing Act. Write to: Office of Single Family Housing, HUD, Room 9282, Washington, DC 20410. You may also contact the Federal Trade Commission. Write to: Correspondence Branch, Federal Trade Commission, Washington, DC 20580. The FTC does not usually intervene in individual cases, but the information you provide may show a pattern of possible violations of laws that are enforced by that agency.
You may also want to contact an attorney to advise you of your legal rights. Under the National Affordable Housing Act, consumers can initiate class action suits and obtain actual damages, plus additional damages, for a pattern or practice of noncompliance. In successful actions, consumers also may obtain court costs and attorney's fees.
By phone: (248) 788-0800 or (800) 945-4506 9:00a.m.-5:00p.m. EST
By US Mail:
Member Mortgage Services, Ltd.
38275 Twelve Mile Road, Suite 100
Farmington Hills, MI 48331