What exactly does it mean to you when your mortgage has been “sold?”
The sale of mortgage “paper” and/or servicing is common practice.
Federal law requires that the outgoing mortgage holder must send you in writing, notification of the sale and provide you with the new company’s contact information. The new company must also send you in writing their “welcome” letter and provide you with clear instructions on how and where to pay your mortgage. To learn more, visit http://www.consumerfinance.gov/askcfpb/215/what-happens-if-my-mortgage-servicer-changes-what-do-i-do.html
So what could possibly go wrong? Realize that many of the servicing agents are not located in the United States; data from the loan package is often manually entered into a new database; and escrow accounts can slip into an abyss. Because you, the mortgagor, are ultimately responsible for your mortgage, taxes, and insurance; you must be vigilant.
The subject of escrows held by a lender (or lender’s servicing company) has been tested in court and it has been determined that “when the lender holds escrow funds for property tax payments, a fiduciary duty exists.” This is a very important decision inasmuch as the lender has the obligation to you to pay all taxes and insurance (should they be collecting for that as well) in a timely manner.
A client recently contacted us for help sorting out the sale of their mortgage and getting their taxes paid on time. After two months of phone calls, and several emails, their property taxes were finally paid. However, the County and Town tax records now show that late payment interest and penalty fees had been levied and received. This indication is not on the servicer’s record, it is on the homeowner’s record.
What’s a homeowner to do?”
- Open all lender correspondence promptly.
- Act on the correspondence immediately.
- Do not be put off by promises or delays.
- Keep copious notes of names, times, dates, and agreements. Record the conversations, if possible (they record theirs)
- Follow up, follow up, follow up.
- Get everything in writing.
- Keep all contact numbers handy.
- Do not hesitate to contact the investor of your loan to let them know of your problems inasmuch as the investor usually contracts the servicers.
If you have any questions, you can always contact us.