Whether you’re negotiating the reinstatement of a loan or a full payoff, be sure to always request detailed breakdowns of the late charges, interest, advances (i.e. property taxes and insurance), legal fees and costs, and other charges claimed by the creditor.
While bank attorneys are nice enough to provide you with reinstatement and payoff figures (after several follow-ups, of course), the banks and its attorneys will never offer you detailed breakdowns of the purported charges unless you specifically request them (and only after several follow-ups, of course). Before you negotiate a settlement, you need to see exactly what charges are being claimed and request proof of the advances when necessary. You will be in a better bargaining position once you have all the numbers. Requesting detailed breakdowns also gives plaintiffs’ attorneys another opportunity to review their records and identify issues that may have been previously overlooked.
I requested a full payoff on one my cases that I’m looking to possibly settle. I was unhappy to see that plaintiff’s attorneys failed to provide me with detailed breakdowns of all charges as I initially requested. You would think that the bank’s attorneys would already have these numbers since they just provided me with the total payoff on their letterhead, but unfortunately, that’s rarely the case.
When I finally received the detailed breakdowns (about 10 days later), I was surprised to see (not really) that the total payoff was now thousands of dollars less than initially claimed as the bank (and its attorneys) inexplicably included duplicative charges (including legal fees) in the previous total amount. While this may be an unintentional error on plaintiff’s part, this oversight can cost you thousands of dollars that you may not have.
This also goes without saying that all of your communications and negotiations must be in writing. Any phone conversations regarding negotiations and settlement should be followed up with an email – this is essential if the matter ever needs to be litigated.
Please feel free to contact me if you have any questions about a payoff statement or any other loss mitigation inquiries that you may have.