In this very difficult economy, many homeowners have found themselves unable to meet their monthly financial obligations, including their mortgage payment which often tends to be one of the larger items on the list. Here are some of the questions we’ve been hearing:
1. Who exactly does own my mortgage? After I signed the papers at the closing, I received a letter from a different company (that is, not the lender listed on the documents I signed at the closing) directing that all future mortgage payments should be made to them.
Answer: The company may be a loan servicer under contract with the true mortgage owner for the purpose of servicing or administering the loan. As long as your checks are being cashed and applied to your loan balance each month (you should check your monthly statements to confirm), it doesn’t really matter. When it’s time to have your mortgage discharged because you have either refinanced your loan with a different lender or you have sold your house, only the true owner or its legally authorized agent has the authority to sign and deliver a valid mortgage discharge. Before you refinance or sell, contact the company in writing and ask for a copy of the legal document which establishes the company’s legal authority to be handling your mortgage loan. You can then provide that information to the closing agent or company handling the transaction in order to facilitate the process and avoid the delays sometimes associated with sorting out the proper parties.
2. Who do I contact to discuss problems with my mortgage payments?
Answer: Once you determine the true owner of your mortgage or its legally authorized servicing agent, try to obtain the name and address of a person (or, at least, a department) in order to request, in writing, whether your lender has a program in place for the opportunity to modify the terms of your loan. If inquiries are made by telephone, remember to request the name and address of the person to whom you spoke, and be sure to follow up with a letter (make sure to always retain a copy of the letter as well as any other correspondence from you to the lender or agent for your file).
3. What kind of changes to my mortgage loan may be available to provide some relief?
Answer: There may be several options, depending upon your particular loan and financial circumstances. For example, an adjustable rate loan may be eligible to be converted into a fixed rate loan; an interest only loan may eligible to be converted into an amortizing loan at a lower rate of interest with principal and interest payments over a longer term (that is, payable over a longer period of years). You will likely be required to provide financial information regarding your income or household income, as well as other assets and liabilities.
Beth H. Davis is a director at Hamblett & Kerrigan, P.A. Her present practice focuses on real estate and business transactions. You can reach Attorney Davis by e-mail at [email protected].