Do You know WHO Owns Your Mortgage?

Mortgage and Lending NMLS #94045

More importantly, how do you find out? If you need to contact your lender about potential loan modification based on genuine hardship or disaster relief grounds, you have several starting points. You may be surprised to learn that find out exactly who owns your mortgage is not something your lender (servicing bank) may know or be willing to share!

One couple took on Goldman Sachs and won: Read this riveting story about Tony and Celia Becker, a couple who took on Goldman Sachs, the owner of their Subprime Mortgage and won court assistance and a modified mortgage which took them several years:

Why would your lender hide from you? Banks and investors simply don't want to have anything to do with the person they are receiving income from. They only care about your interest payments arriving on the plus side of their account sheet every month. If your funds don't arrive, they send the collections department out to collect, literally or else they start foreclosure proceedings. These days you can be less than one month late for the calls to start. Heaven help you if your bank has your cellphone number.

Sure you can look up your home address and find out if your loan is a Fannie Mae or a Freddie Mac but that's just the portfolio manager. The lender (you are told) is somebody like Bank of America or Wells Fargo. When in fact, the final decision making investor is much more likely to be a Goldman Sachs or a Mutual Fund or the country of Norway! No kidding. The bank on your mortgage papers and monthly statement is just the servicer. A nice tidy anonymous face for your actual lender.

Who do you call? First you call your servicer; the phone number on your mortgage statement will take you to the account management department of that bank who services your loan. They should be able to tell you if your loan is a Fannie Mae or Freddie Mac loan. Most banks, even local banks, sell their loans to these Government Sponsored Enterprises who own the lions share of mortgages in America. Make that 'manage'. Who really owns them is the big mystery.

Do you know where your mortgage is at night? If some obscure arm of Goldman Sachs or AIG or the country of Norway owns your mortgage, chances are it's of part of a much larger portfolio of loans. You could be buried in a pile of other homeowner's loans now woven into some complex trading instruments. You've heard of Credit Derivatives and Credit Default Swaps?

"Financial Weapons of Mass Destruction"was the name given to Credit Default Swaps by none other than Warren Buffet. If you wonder why your 401K tanked last March, Wall Street allowed these instruments to be created and traded with no regulation whatsoever creating enormous losses by such banks as WaMU, Indymac and Bear Stearns. Many Mutual funds and banks are heavily invested in Mortgage Backed Securities which took heavy losses as a result of these 'bets'.  The Fed Chairman at the time this all began, Alan Greenspan, allowed self regulation by the banks on credit derivatives. They are traded so often it's hard to keep up with who actually owns them. Hardly anyone can explain how they work. 

More on Credit Default Swaps:

Distressed borrowers know your rights! You need to know where to start. READ THE FINE PRINT on all your loan documents. You may find some information in your loan papers that will help you understand your rights in case you need to seek legal representation. Take heed from the Becker's story (link above) who found out they had the right to appeal for assistance in the case of disaster (they suffered wildfires and related financial loss).

Banks accused of harassing borrowers? What a shock. The very institutions charged with legally managing your money have been found to turn nasty when the going gets tough. According to this McClatchy article link "mortgage servicers, have been cited for badgering, manipulating or lying to their customers; sticking them with bogus fees, or improperly foreclosing on them."

If you suspect fraud on your loan: Look carefully: anything on your loan papers that doesn't match your application or the terms you were originally offered is suspect. If you were 'steered' into a high cost Sub Prime loan in spite of good credit, this might indicate predatory action on the part of your lender. (Sub Prime loans paid higher commissions). In either case, contact your State Attorney General right away to file a free consumer complaint. They will advise if any suits or claims are pending against your lender. And don't wait. If you are facing imminent loan default (missed payments) you may not have much time to lose.

You CAN file a complaint yourself. Fraud is a federal crime and it is investigated by the FBI.

All the best in your search!

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NMLS# 94045



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This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Mortgage / Finance
It's all about them (ThemThem)
Loan Modification Program
Short Sale and Loan Modification Nightmares
loan fraud
distressed homeowners
loan modification
loan servicer

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Christine Hynes
American Capital Corporation - Laguna Beach, CA
Orange County Senior Loan Consultant

Great info Susan. Lots of people don't know that sometimes their banks arent actually the holders of their loans and have no idea how to get in touch with the people that do!

Jan 11, 2010 10:23 AM #1
Susan Templeton
Bellingham, WA

Yes, one of life's little banking mysteries!

Jan 11, 2010 10:35 AM #2
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