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What is a Corporate Advance?

Posted by David Humphreys | Mar 06, 2018 | 4 Comments

You should have a healthy dose of skepticism and concern if your monthly mortgage statement includes a line item charge for a “Corporate Advance.” While the phrase sounds innocent enough, it is not.  What you do not realize is that this phrase “Corporate Advances” may cost you your home.

What does that phrase even mean? Corporate Advances are “disbursement for servicing-related expenses (not escrow expenses) paid with servicer funds rather than escrow funds, to be recovered from the borrower. They could include foreclosure expenses, attorney fees, bankruptcy fees, force placed insurance, and so forth” according to the National Consumer Law Center. The Federal Trade Commission warns “it's important to review your billing statements carefully and question added fees. If fees appear on your statement under general headings like “other fees” or “corporate advances,” contact your servicer – in writing – as soon as possible to get an explanation of those fees and a reason they've been charged to your account.”

From our experience representing consumer law clients facing foreclosure, “corporate advances” can be a black box where your lender or mortgage loan servicer hides unwarranted, unlawful fees and charges that you are not legally required to pay. When it comes to mortgage loan services, they know that they have the advantage of being able to threatened or bully you into payment of these "corporate advances" even if they are not owed. After all, the have a lien on your home and they can use it to threatened you with foreclosure.

If your mortgage servicer takes your regular monthly payment and instead of applying it to your loan, uses it to pay a corporate advance, you need to speak with an experienced consumer protection lawyer right away.  This misapplication of your monthly payments from your account toward these phony expenses could leave you months past due, allowing the mortgage servicer to claim (falsely) that you did not make your monthly payments.  Before you know it, foreclosure related fees can be added onto your account and you might find yourself buried in debt. 

If you recently emerged from a Chapter 13 Bankruptcy Plan and you see corporate advances on your mortgage statement, please seek help immediately to save your home. 

If you see “Corporate Advances” on your mortgage statement and you fear or are facing a foreclosure, you should contact Humphreys Wallace Humphreys today. You can contact us by clicking Free Case Review or by clicking on the contact us page on our website.

About the Author

David Humphreys

David Humphreys has been practicing law since 1987. He was a member of the first class (1994) of the Gerry Spence Trial Lawyers College, Dubois, Wyoming. He was recognized in 2004 by the college, along with his partner, Luke Wallace, as the Warriors of the Year for the 18-state South Central regi...

Comments

raymond pugh Reply

Posted Mar 19, 2020 at 15:03:46

Carrington mortgage has listed such fee.We are not even late.

David Humphreys Reply

Posted Mar 20, 2020 at 07:33:45

Raymond, thanks for your input. We are always disappointed when predatory fees are added and when payment is bullied by threats of foreclosure.
Feel free to contact us to discuss if you are interested.
Thanks again for your comment.

Clifford Williams Reply

Posted Jul 07, 2020 at 14:51:07

I googled the term “advance balance”, as that appears on my mortgage statement. We were threatened with foreclosure by Wells Fargo. We got the notice from the law firm they hired. I spoke to Wells Fargo’s home preservation department and they put us on a forbearance plan, which suspended the foreclosure. We have caught up by making double payments each of the last 4 months. We are back on schedule and the foreclosure matter has been dismissed. I believe the advance balance are fees Wells Fargo paid the law firm. So, how can I be responsible for attorney fees that weren’t actually awarded?

David Humphreys Reply

Posted Jul 15, 2020 at 20:15:41

Please call our office for a free consultation. We will do our best to help and to connect you with a lawyer who can help you.

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