30 Day Notices: Is Return Receipt Mail the Best Way to Send? Some mortgages require that servicers give borrowers a specific written 30 day notice before acceleration Usually, those mortgages provide that notice be given "by delivering or by mailing it by first class mail." (for example FHLMC mortgages). In order to comply with that requirement and to avoid spurious claims of non-receipt, many servicers attempt to go a step further by sending the notices by certified mail, return receipt requested. However, this may not be a wise strategy.

With a nod to the U.S. Postal System, New York, and a number of other states, provide that notices sent by regular mail are presumed to be delivered and that mailings are complete upon deposit. However, mailers who choose to use the certified return receipt may be viewed as forgoing this presumption, and relying instead on the return receipt. The problem is, delinquent borrowers may not sign for these letters. Moreover, if the borrower is not at home when the postman comes to deliver the letter, a yellow notice is left for the postal customer to pick up mail at the post office. All too often, delinquent borrowers know or suspect that certified mail is "trouble" and do not pick up this mail. Absent the presumption of delivery with first class mail, the servicer has no proof of delivery or when the letter was delivered.

Even if the borrower foils the intent of the return receipt by failing to pick up or sign for the letter, a servicer may still be protected. When sending certified mail, the sender fills out a receipt, which is postmarked or date stamped by the post office and returned to the sender. This receipt can provide the proof needed. However, too many servicers do not have procedures in place to save those receipts in the servicing or default file. The servicer's printed letter bears a legend on top which says "Certified Return Receipt", but when pressed for the date of mailing (in order to show that the borrower was indeed given 30 days before acceleration) no receipt exists. Even if the letter itself is dated, there is no indication when it actually went out or when it was received. Moreover, the absence of a receipt may cast doubt as to whether the letter was even mailed. To make matters worse, In some shops, the 30 day letters are computer generated and sent out automatically; copies of the actual letters are not kept. In such cases, if the borrower challenges the lender's compliance with the 30 day notice provision of the mortgage, the lender has no letter, no receipt and effectively, no response.

What is the moral? If you do choose to send 30 day notices by certified mail return receipt requested, make sure you also obtain stamped receipts from the post office and keep them in the servicing file. If this is not practical in your shop, simply follow the mortgage terms and send the letter by regular first class mail. Make sure the letter is dated (or document mailing on the system) and always,keep a copy of the letter.