Mortgage Servicer
By Kurt O'Keefe, Attorney at Law on Nov 24, 2007 in General Bankruptcy Information
    A mortgage company owns your mortgage, that is, lent you the money to buy your home. But you send your payments to a mortgage loan servicer, usually at a P. O. Box out of your state.
That address is a lock box operation. That is, people are paid to open the envelope with your payment, put the check or money order in one box, and throw away everything else.
That is why you do not get an answer to a question included in a letter or note you sent with your payment.   The servicer handles the escrow account, for payment of taxes and or insurance, if there is such an account. If not, they send the money to wherever they are told, being paid a part of it for their services.
Some servicers even outsource some of their functions, like keeping track of the property taxes.
It is all about outsourcing.
Mortgage companies now outsource everything.
They just provide the money.
They have mortgage brokers find them customers, pay title company agents to handle closings, and more often than not flip, or sell, the mortgage within days.
But the servicer is the face of the mortgage company, because that is who the customer deals with.
And the servicer is hired by the other end of the transaction. If they are messing up your payments, you cannot fire them.
You do not even get a copy of the contract they have with the mortgage company.
Usually, the only way for the servicer to make more money on your account is if you screw up, so they can do property inspections, and maybe get some of the late fees you will be charged, so called “junk fees.”.
So, there is a perverse incentive for them to be sloppy. They can charge you with the effects of their sloppiness, and make a profit.
It is not the mortgage company that hired them. As far as their boss knows, everything is fine.
Most folks are aware that their mortgage can be sold many times. This may or may not result in a change of servicer.
However, the servicer can change without the mortgage being sold, depending on those contracts we cannot see.
You should be notified of such a change, because that will change where you send your payments.
Check the link to the HUD site above for some of your rights under the RESPA statute.
As always, keep your own records of payment amounts, and where you send each payment.
Use another of your rights under the RESPA act, and send a qualified written request when you want a full accounting of what has been done with your payments.
If you liked that post, then try these...
How Can I Get a Copy of My Bankruptcy Paperwork from 20 Years Ago? by Jonathan Ginsberg, Atlanta Bankruptcy Attorney
What is the Best Interests Test under Section 1325(a)(4) of the Bankruptcy Code? by Pamela Stewart, Attorney at Law
Find tax deductions in Chapter 13 payments by Cathy Moran, California Bankruptcy Lawyer
You must be logged in to post a comment.