Who Owns My Mortgage?

Q: Dear Mr. Gumbinger: Who owns my mortgage, and why does someone else service the loan?

I was told by Fannie Mae over the phone that they own my loan. When I went into the loan lookup it said Fannie Mae does not find a match, therefore, they do not own the loan. How can this be? This has happened many times over.

I have been told by my servicer that both Wells Fargo and Citibank own the loan. Something is wrong.

A: The owner of the loan is most often the "investor" -- the entity who put up the actual funds to make your mortgage happen. This may be the original party for your transaction, such as a bank, but loans (like other investments) are bought and sold between parties, so the owner can change from time to time and could be anyone from a pension fund to a real estate investment trust (REIT) or other entity (you might actually be a part owner of certain mortgage loans in any bond mutual funds investments you hold, for example).

That said, the servicer is usually a separate entity, whose responsibility is to collect the monthly payment from you, maintain escrow accounts, and distribute those funds to other parties (local tax authorities, insurers and to the owner of the loan). For many lenders, this is beyond their capabilities or business model, and so these "servicing rights" are actually sold to other entities that make a living providing these services to loan owners and homeowners.

Some large lenders do their own servicing for their own loans and since they have the capacity, may also do servicing for other investors, too.  There are also specialty "subservicers" who may be contracted for specific tasks (loan workouts, modifications, etc.) on behalf of the actual servicer.

In many cases, a large lender may be the servicing entity for large investors or guarantors of loans, like Fannie Mae or Freddie Mac. They may have even originated your loan, and since your contact would be with this entity, and all your paperwork/statements/correspondence would come from them, you might come to believe that they actually own your loan, when in reality they may have long ago sold the actual mortgage to another party but retained the servicing rights.

If Fannie Mae or Freddie Mac owns or guarantees your loan, you should be able to determine this by using the loan lookup tool at www.makinghomeaffordable.gov. If you're not there, there is also a list of lender contacts, so that you can contact your mortgage holder directly.

If you have a specific complaint you are trying to resolve with your servicer, the Consumer Finance Protection Bureau welcomes and openly solicits for these kinds of queries and does follow up on them -- you can find acomplaint form and learn more about your rights and obligations at http://www.consumerfinance.gov.

The original article: Who Owns My Mortgage? appeared on HSH.com.

Where I'm putting my money now
Opportunities to get wealthy from a single investment don't come around often, but they do exist, and our chief technology officer believes he's found one. In this free report, Jeremy Phillips shares the single company that he believes could transform not only your portfolio, but your entire life. To learn the identity of this stock for free and see why Jeremy is putting more than $100,000 of his own money into it, all you have to do is click here now.

Additional mortgage articles can be found on HSH.com

How much of your payment goes toward principal and interest?

See today’s current mortgage rates

Homebuyer timeline: Here’s exactly what you need to do to get ready to purchase a home


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2885367, ~/Articles/ArticleHandler.aspx, 11/26/2014 2:02:29 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement