Has My Mortgage Loan Been Sold Again?
By Pamela Stewart, Attorney at Law on Apr 14, 2007 in General Bankruptcy Information
Did you recently receive a letter from your mortgage company advising you that your mortgage payments should be sent to another mortgage company? If you did, you are not alone. What has happened, in most cases, is the “servicer” of your loan has changed - not who owns the loan. A mortgage servicer is a company who has bought the rights to service your loan. This means they are responsible for collecting your monthly mortgage payment, collecting your escrow payments if your loan is escrowed, making sure the property is insured, and so on. The servicing rights are considered an asset in the financial world and the servicing rights can be sold over and over again. What does this mean for you - the homeowner? A lot. The new servicer may not receive the documentation to reflect when your payments were received or how they were applied. Additionally the funds in your escrow account may not be transferred to the new servicer. The new servicer may then assert you missed a payment or payments that you really paid or that your escrow balance is short. It is very frustrating, time consuming and expensive for you to prove you really did make your payments. And, if for some reason you do get behind on your payments or you end up in bankruptcy, the servicer is going to charge you fees that they may not be entitled to.
Therefore, it is very important for you, the homeowner, to keep any and all records and documentation pertaining to your mortgage loan. I would encourage you to start a file or 3 ring notebook and keep every statement you receive, every escrow analysis you receive, all correspondence you receive, and a copy of every payment you pay to the mortgage servicer. I would also recommend that you keep copies of the declaration page of your homeowners insurance in your folder. When the servicer makes a mistake or misapplies your payment(s), you will be able to get the matter resolved in a much quicker and less expensive manner.
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