There is much talk about the fact that the apparent lender in a short sale, loan modification, Deed in Lieu, etc is not the "owner" of the debt. This is true....a majority of loans are sold within two years of initiation. In this regard, the original lender becomes merely a servicing agent (typically through a wholly owned subsidiary). The last time that I checked, for example, Wells Fargo held virtually none of its real estate and even automobile debt. It historically sells it shortly after the transaction.
It is the complexity of this relationship that gives us inconsistency in matters such as loan modification, deficiency judgment waivers, deeds in lieu. Generally, debt is bundled and sold but the sale is contractual. The debt is rated and packaged with debt of similar rating. A block of debt will be sold with or without recourse to the original lender depending on the rating and the agreement, at that time, between the original lender and the investor.
It is unlikely that we will ever have consistency because of this. The contractual relationship - rights and duties - are different in varying scenarios. Also business and financial cycles change - there are times when a holder of debt wants to charge down the debt, and other times that it specifically does not want to - all as part of a tax strategy that will inherently change over time.
In my opinion, one of the first things that an attorney should do is determine who owns the debt AND when they acquired it. Lenders are NOT forthcoming with this information, but it is almost always relevant and the home owner has a right to the information. In fact, by Federal law, they must be notified when the loan is assigned - AND they must be notified by the assignor and the assignee. This rarely happens and it is leverage that I have utilized to get what I want.
Frequently, just pushing for this information will get a desired result because the lender/invesotr, do not want the truth to come out...and it always does....
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