Friday, May 12, 2017
Is My Loan Servicer The Same As My Mortgage Company?
When you buy a house you have to get a loan and give the lender a mortgage on the property. The mortgage secures repayment of the loan, and is what gets foreclosed on if you are not able to make your house payments. Many times you will make an initial payment to the bank that gave you the loan, but thereafter receive notice to send your payments to a different entity. This can be confusing, and leaves a lot of homeowners wondering who is really in charge of their mortgage. It might seem like a minor issue, as long as you are paying, but can become very important in the context of a foreclosure action. This is because the entity that starts a foreclosure action must have the legal ability to do so; it is called legal standing. Only the entity that holds your loan (note) should be permitted to foreclose. So, knowing the difference between the different parties becomes vital when you are defending a foreclosure and is also something you should know just for the day to day management of your loan.
The loan servicer and mortgage company may or may not be the same company. Here is the role of each of the parties:
• The mortgage company is the bank that loaned you the money to buy the house.
• The servicer is the company that handles processing of your payments.
These two do not have to be the same company, and that is where it gets confusing. If you have a question about your loan it would seem logical to call the bank that gave it to you, but if the bank is not also servicing the loan they will not have the information you need. Instead, you will need to get in contact with the servicer. Both of these entities are regulated by the federal government, and so have to follow certain rules while managing your loan and in their dealings with you. One of the most important of those rules is the one mentioned above, which one has the legal right to enforce the loan? A lot of foreclosure actions have been challenged on this issue, and if you are facing a foreclosure you should explore this topic thoroughly as part of your defense.
For more information about mortgage holders versus mortgage loan servicers, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.