My mortgage was modified before transfer to M&T, who held payments in suspense for 3 months. Now reporting full payments late.

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My mortgage was modified before transfer to M&T, who held payments in suspense for 3 months. Now reporting full payments late.

Anonymous Aug 21, 2014 Bankruptcy 6 views 3 answers

I just got Ch 13 discharged. I have made payments faithfully for 3 years to both mortgage companies. They state that because of their internal rules"unapplied funds" (not due to shortage!) they did not apply 3 payments, held mortgage payments in suspense & tried to refuse payments. Now, they report account as 3 months in arrears when I have cancelled checks. I actually overpaid 2 months! What can I do? My lawyer is out of case as it is over. I need suggestions. Can they be held for incorrect reporting, willful misreporting, etc.? They KNOW I paid on time but says it has to do with loan modification that prior bank did and that they were behind in processing large chunk of mods so put every payment in suspense. This makes no sense as loan was fully modified before reaching them. Thank you.

Shelley Elder · Answer 1 · 2026-06-15T12:01:56+00:00

Although the mortgage company can hold some of payment in suspense this appears to be inapproriate. You may need a litigator to write to the company and if that does not work filing suit probably will.

Matthew Berkus · Answer 2 · 2026-06-15T12:01:56+00:00

We're the initial 3 months a trial modification? Keep in mind trial modification payments are actually default payments, you are not paying the contractually due amount. However, you didn't give us a time line so no way to really say, just speculating. In any event, seems like your concern is over the credit reporting. That is a FCRA issue, so you need to start with credit report disputes with the credit reporting agencies.

Lynda Wesley · Answer 3 · 2026-06-15T12:01:56+00:00

First try filing a dispute with each of the 3 big reporting agencies: Equifax, Experian and Transunion. Do your disputes in writing and send them supporting documentation. That might solve the problem. You could also contact the prior bank and try to get them to correct the record.

My mortgage was modified before transfer to M&T, who held payments in suspense for 3 months. Now reporting full payments late.

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