Advice: Property Law The bottom line on the first question is, they don’t believe you have any right to know who your lender is, and they’re not about to tell you.
Years ago (when Banks used to follow the law), if they sold your mortgage, they recorded an Assignment of Mortgage in the public records, so you (and the rest of the world) could see who the mortgagee (i.e., lender) was. But when the fancy pants idea of securitizing mortgages took hold, they stopped doing that. They didn’t ask the state legislatures to change the rules – they just stopped following them. Now they have complicated the subject beyond all reason, using “Servicers” to take your check, maintain your insurance and tax escrow, charge you late fees, and do everything else your lender used to do. Their position is that you don’t have the right to know who presently owns your mortgage, just the name of the servicer.
That leads to the second question “Why is my lender treating me like this?”
The servicers don’t have the same vested interest in your success as a homeowner as the lender does (or the investor, if your loan has indeed been securitized). Their vested interests are primarily in a myriad of small fees they make for doing that “grunt work,” along with another list of fees that they make if they refer you to a law firm to foreclose on your home. Whether foreclosure is a good idea for the lender (or investor) or not, the servicer makes the same list of fees, a list that can be artificially inflated (unknown Tenant 1, Unknown Tenant 2, Unknown Spouse, etc.).
Any guess who drives this bus? The lender? No. The investor? NO! It’s the servicer.
It is our contention that the servicer has an actual conflict of interest with his client, the lender / investor, but nobody seems to care about that, because they’re all making money hand over fist.
So, what we see as a result of all this perversity, is homeowner after homeowner who is literally tricked into foreclosure (by dangling a modification as bait, for example), even though an actual modification would much better serve the interests of the lender / investor. Those fees get paid even if the foreclosure can’t be won, because the loan documents are in such a sorry state that nobody can prove who actually owns the loan.
But, we also see record profits for the Banks. They don’t really care if they make their money as lender or as servicer. Naturally, they don’t really see this system as broken. It works just fine for them. So, sorry about that house you used to call home.
The good news in this otherwise swamp is that federal law gives the consumer a tool, called the Qualified Written Request. Under 12 U.S.C. Section 2605(e)(1)(B), if the borrower sends a demand to the servicer at the address in your monthly statement, they must answer your questions. It’s not a magic bullet, but if used correctly, can help you get to the bottom of things.
Article byBy Tom Broderson, Esq.. For further information call 727.363.6100 or visit PropertyLawGroup.com