So many Americans today are facing debt collection efforts that the system often appears to be overwhelmed. Mistakes seem to be getting more and more common.
A recent article by Teresa Dixon Murray in the Cleveland Plain Dealer described how a minor mortgage payment error can lead to unbelievable consequences with a bank or other creditor.
The article explains that several months ago a couple in Rocky River, Ohio made a 70 cent mistake in a $1,500 mortgage payment. The next invoice arrived with $256 in late fees. That was followed by urgent phone calls from the bank threatening the couple with foreclosure. The couple spent hours on the phone with various bank offices and repeatedly tried to pay the 70 cents, but the bank was unable to correct its records for months. To make things even worse, the bank applied subsequent payments entirely to interest, causing a loss of over $2,000 to normal principal reduction.
The bank finally straightened out its records after many months - - but only after the Cleveland Plain Dealer reporter intervened. I have represented several clients recently who had to hire an attorney to resolve creditor errors. Mortgages are frequently transferred from bank to bank and that makes it even more difficult to resolve even minor errors.
Millions of Americans today are facing collection actions. The system frequently seems overwhelmed, and common sense is sometimes in short supply. Almost anyone can suddenly find themselves facing unanticipated debt collection efforts. It is very unfortunate that a lawyer - - or even a newspaper reporter - - is sometimes required to correct even a minor error.