This is a tough one. (That being said, there is a list of names at the end of this blog entry with websites).
I received a lengthy email question today from a client who had been making payments on three student loans, but the bank screwed up and only applied payments to two of them. The other was in default and going to a collection agency. He wrote:
When we made payments, we would make a single payment online, or sometimes over the phone, and then Chase would allocate it across the three loans.
I don’t really know how it happened, and it seems a bit unusual to me, but none of the payments were going to the loan which my mother-in-law had co-signed on in the past 4 months. Instead, the money was being allocated to the other two loans. I contacted Chase yesterday and spoke with several people, and one of the representative that I spoke with didn’t have information about this third loan on her screen until I asked her about it and she did some digging and was able to find it. She acted surprised that it wasn’t showing up, but I obviously have no idea if she really was or not. I then learned that the third, co-signed loan was in default, had been charged off, and was now in transit to Chase’s Recovery Department. I got the number for the Recovery Department and spoke with an individual who said she’d be managing my loan but that she hadn’t received the file yet, and that she wouldn’t receive the file until next week.
Not surprisingly, the bank misapplied payments and then couldn’t find a record of the third loan, and couldn’t even find an account manager who knew what to do. Now, his co-signed family member was suffering on her credit and possibly facing a lawsuit.
In this kind of situation, you need to deal with the lender directly and have solid evidence that they misapplied payments. When they drag their feet, you can get the state of Utah (or your state) involved.
You can file a complaint with:
1. The Utah Department of Financial Institutions here: http://www.dfi.utah.gov/Complaints.htm
2. The Utah Department of Commerce, Division of Real Estate here: http://realestate.utah.gov/complaints.html
3. The Utah Department of Commerce, Division of Consumer Protection here: http://www.consumerprotection.utah.gov/complaints/index.html
Each agency covers something a little different, but there is overlap.
The Utah Department of Financial Institutions covers:
|The Department is responsible for chartering, regulating, supervising and examining state-chartered financial institutions. DFI also has jurisdiction over residential mortgage and consumer lending.
The Utah Department of Commerce, Division of Real Estate covers:
The Utah Division of Real Estate has regulatory jurisdiction over
- appraisal management companies
- residential mortgage lenders and brokers
- real estate brokers and agents
- salespeople for subdivisions, timeshares, and camp resorts.
The Division’s jurisdiction over mortgage lenders is limited to the origination of residential, retail, first mortgages. Banks, credit unions, loan-servicing, and second mortgages are regulated by the Department of Financial Institutions.
The Division does not have jurisdiction over homeowner associations, providers of nightly lodging, landlord/tenant disputes, contract disputes, or monetary damages.
The Division uses complaints to regulate licensees and investigate unlicensed persons who are acting as licensees. It does not mediate or resolve professional or personal disputes. If you believe you have a legal claim for monetary damages, you should consult an attorney about pursuing a civil lawsuit
The Utah Department of Commerce, Division of Consumer Protection covers everything else:
You may also use the Consumer Resource Guide to help determine the appropriate contact for a complaint.
Please contact the Department of Real Estate regarding any loan modification complaints.
Please contact the Department of Financial Institutions regarding Banking complaints.