Who Owns Your Mortgage: The Who, What, Where, When, and Why
No one could have predicted the extent of the crisis of the housing market or the economy. When you were closing on your dream home five years ago, you could not have imagined what you would do if you lost your job, your spouse’s overtime got cut, or the value of your home decreased so significantly that you were underwater. These crises and others are happening to families all over the country. Chances are when you signed your documents you were not fully aware of the intricacies of the relationship between your mortgage loan, the servicer, and the owner of your mortgage. Knowing the facts about your mortgage can arm you with your rights, educate you on your options, and help you make better decisions about this significant investment.
Who are the players involved?
Whether you are in financial crisis or just want to be better informed, it is important to understand the players involved with your mortgage. A mortgage can be turned over to different owners or investors multiple times within its term. The change in your investor may or may not be disclosed to you by the servicer of your mortgage, but the knowledge of who owns your mortgage can help you get answers about workout options that can save your house and your credit.
What is the difference between your servicer and your mortgage investor?
The first point of contact for all homeowners is most likely their mortgage servicer. This is a company hired by the investor of your mortgage to do the day-to-day grind on your loan, keeping track of the payments and processing the paperwork. Your servicer is important in the modification process because they could be the ones who will have to fulfill your written requests and do the research into the ownership of your loan.
The owners of your loan are also known as investors. They are the piggy bank of your loan, possibly the original financial backers, or new investors who bought your loan hoping you will keep up with your end of your mortgage contract. They are also the puppet masters of your mortgage as they control the servicers in most, if not all, major changes to your loan. In Massachusetts, it is not required that mortgage assignments be recorded with the Land Records Registry. Therefore your loan investor could change hands multiple times, while using the same servicer and you may never know.
Where can you go to easily find out who owns your mortgage?
When you realize you need help on your mortgage or just want to be better informed, the best place to figure out who to turn to may be process of elimination. Two key mortgage backers, Freddie Mac and Fannie Mae, have easy to use look up tools available via the Internet. By putting in some basic information regarding yourself and your loan you can find out if your loan is owned by either one of these major investors.
If neither of those yields results, try looking back at your original closing documents to determine if you have an FHA loan. The Federal Housing Administration is an agency of the federal government, established to insure private loans. If the FHA is your mortgage investor, your closing documents will have a FHA-specific loan case number referenced in them and will also have FHA specific documents that general mortgages do not.
When can you use legal leverage to get the information?
After a little of your own detective work, you may not know who owns your mortgage, but you will have narrowed it down quite a bit. So let’s step back and review what we do know. You will always know who your servicer is — if it changes you are required to receive notice regarding the new servicer’s contact information and where you will now send payments. Most important to any mortgage investor is making sure you know where to send payments, but your mortgage servicer is required to offer you more.
Under the Truth in Lending Act, or TILA, the government has stepped in and told servicers that upon written request they must provide general investor information to the borrower. What this means is you can write a letter to your servicer, citing 15 U.S.C. § 1641(f)(2), a provision of TILA, and request that the servicer provide the name, address and telephone number of the owner of the mortgage. They are required by TILA to respond to you within 10 business days. If they choose not to reply to this request, 15 U.S.C. § 1640(a), coupled with the Helping Families Save Their Homes Act of 2009, allows for recovery which can include actual and statutory damages, costs, and attorney’s fees.
In addition, the Real Estate Settlement Procedures Act, or RESPA, allows for you to submit a “Qualified Written Request” to your servicer requesting information concerning the servicing of the loan or to dispute accounting errors. The servicer is an agent of the mortgage owner and a request for the above information should satisfy the requirement that inquires must be related to the loan servicing. Under RESPA, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the servicer is required to provide the information within 30 business days. If the servicer fails to comply with the “Qualified Written Request,” the borrower is entitled to actual damages, up to $1000 of additional damages if there is a pattern of noncompliance, costs and attorneys fees.
Why does it matter?
With this Internet investigation and all these acronyms you may be asking yourself why all this matters. If you’re in a good place with your mortgage, the short answer is it may just help you be better informed. But just as the economy slid quickly into recession, this information could play an important role if a financial crisis hits close to home. Staying informed about who owns your mortgage can protect you in the future and allow you to stay up-to-date about one of the largest investments you’ll make. Not all investors participate in every program, and some investors, like Fannie and Freddie, have additional guidelines they are required to uphold.
By educating yourself on who owns your mortgage you can make better, more educated decisions about your options. The only way to know if your rights are being violated is to know what your rights are.