Your Mortgage : Don’t Pay Home Loan With a Money Order

QUESTION: Two months ago, my out-of-state mortgage company claimed they did not receive my mortgage payment. They sent me a nasty computerized late notice demanding my payment plus a $49 late charge. But I have a perfect on-time payment record and they know it, so there was no reason to get nasty.

I contacted the grocery store where I bought the money order for the mortgage payment but the manager says it will take at least two months to trace if the money order has been cashed.

When I sent in my payment for last month’s mortgage payment, the mortgage company sent it back with a rude letter, refusing to accept it because they claim I still owe the payment for two months ago plus the $49 late charge.

This lender doesn’t have an 800 toll-free phone number and when I try to call them I always get a busy signal. Yesterday, they sent me a notice giving me 10 days to pay or they will begin foreclosure. What can I do to clear up this mess?

ANSWER: In the future, never, never, never make important payments by money order. As you discovered, tracing a money order is virtually impossible. Incidentally, I repeatedly warn my tenants not to pay rent with money orders but they keep doing it. Get a checking account so you can control your finances. Not having a personal checking account is extremely foolish.

Somehow, you’ve got to talk to a supervisor or officer with the mortgage company. Perhaps if you call information in the distant city you can get another phone number for the lender that isn’t always busy. Work out an arrangement to pay the two missing payments. Most lenders will waive a late charge if you are forceful. Emphasize your excellent payment record.

You should know that lenders earn millions of dollars in late payment fees, so they are eager to claim loan payments were received late. To prevent your problem from reoccurring, after you get your personal checking account, send your lender 12 post-dated checks for the next year.

Enclose a letter explaining you want no more hassles and send it via certified mail with a return receipt. I’ve used this tactic with several nasty loan servicers and have had no further attempts to extort late charges.

Some Lenders More Flexible Than Others

Q: My husband and I are frustrated prospective home buyers. We have saved almost $20,000 for a down payment and our parents will help us with any additional amount we might need. But our problem is qualifying for a mortgage.

We talked to a loan officer at the S&L; where we have our savings and checking accounts. She said we don’t earn enough income. But we pay our bills in full each month and only have one installment loan for our car and it will be paid off in a few months.

We were so proud of ourselves for saving almost $20,000 in just a few years, but when the loan officer said we couldn’t get a large enough loan to buy the home a local realty agent had shown us we were heartbroken. Any ideas?

A: Yes. You were probably talking to the wrong lender. There are “good guy” and “bad guy” lenders. The “bad guy” lenders are inflexible and require their mortgage borrowers to meet the tough, unreasonable loan standards of the big secondary mortgage market buyers such as Fannie Mae and Freddie Mac.

You were probably talking to such a lender. For example, if your loan payments will take over 28% of your gross income, Fannie and Freddie don’t want to buy your loan. I’d like to know where they got that low percentage. Borrowers in circumstances like yours can obviously afford to pay more of their income for mortgage payments.

But the “good guy” lenders are the flexible portfolio lenders or the lenders who sell their loans to more reasonable secondary market buyers such as pension plans and insurance companies.

Portfolio lenders, including some of the nation’s largest loan originators, keep mortgages in their loan portfolios several years to “season” it. Then the lender may sell it after you have established a solid payment record.

Some flexible portfolio lenders will approve home loans where payments take up to 50% of gross income when the borrower has good credit, good income and few debts.

Questions and comments may be sent to the Real Estate Editor, Los Angeles Times, Times Mirror Square, Los Angeles 90053.