Beverly and Kelly Carey took out a mortgage in 1984, for the purchase of their home in Tulsa County. The mortgage secured a 15-year loan.
In 2001, after having faithfully made payments on the mortgage, Mr. Carey continued to receive statements showing that he had a considerable mortgage balance. When questioned about this, the mortgage company took the position that the loan balance had not been paid off and, in fact, had increased over the years due to their method of computing interest.
The Carey’s requested that the debt be verified and the mortgage company failed to provide them with adequate verification of the debt. The mortgage company then sought to foreclose the mortgage, claiming more than $20,000 was due on the note. Carey claimed that the note had been paid in full and requested that the mortgage company release the mortgage on his property.
Frasier, Frasier & Hickman, LLP, intervened on behalf of the Carey’s and filed several counterclaims in Tulsa County District Court. One claim was that the mortgage company had failed to release the mortgage after it had been paid. A second claim by the Carey’s was that the Fair Debt Collection Practices Act had been violated.
Early on, the mortgage company dismissed its claim and filed a release of the mortgage showing it paid in full. Substantial monetary damages were later paid to the Carey’s.
The Fair Debt Collection Practices Act requires a debt collector to provide a consumer with evidence that a debt exists and the amount of the debt. The Carey case is a good example of why it is important to keep good and accurate records of your mortgage or other loan payments and why you should not rely on the mortgage company for an accurate account balance.
In the Carey case, the mortgage had been assigned to several different lenders over time and the accounting procedures varied at the different companies. A consumer should make every effort possible to keep good and accurate records. Communications with the mortgage company or lender should be done in writing, so a record can be kept.
Accounting errors by a lender generally are hard to dispute if the borrower does not keep good records. However, the Carey case shows how good record keeping enabled the consumer to resolve the dispute in his favor – and how the creditor may pay dearly for its mistake. If you are experiencing similar issues with your mortgage company, contact Frasier, Frasier & Hickman today at 918-779-3658 for a free consultation.