“Who Owns My Home Mortgage?”
What many homeowners do not realize is that the person who owns your loan and the servicer you pay your bills to aren’t necessarily the same person. This process is called loan servicing. Investors will enter a private contract with loan servicers, and these servicers collect the timely payments of interest and principle from borrowers. Some major investors that you may have heard of are Freddie Mac, Fannie Mae, and Ginnie Mae.
How does this work? Servicers are given the duty of collecting payments from borrowers and then repaying the investors. The servicer takes a risk in this sense; they hope that borrowers either pay early or pay late enough to collect a late fee. The servicer can then pay the lender at a reduced cost and pocket the rest of the payment. Now you see how the secondary loan market can be highly lucrative for effective servicer’s.
The downside of this business is that the originating lender is not required to tell you who is servicing your loan. Moreover, you may see the servicers name when repaying your loan, but may never know who the originating lender is. This can be frustrating when making payments because, hypothetically speaking, the lender may sell your loan an infinite number of times over the life of your loan making it very difficult to keep track of who you should be paying.
All you need to do to avoid confusion is to come prepared right when you are issued your mortgage. If you are buying or refinancing a home, ask your lender who is servicing and if your loan will be sold. Chances are that your loan will be sold at some point, but after this initial conversation you will have no surprises if the company whom you pay changes.
Are you curious about who owns your home loan? Here are some great resources:
Fannie Mae has an awesome tool to assist homeowners determine if they have a Fannie Mae-held mortgage. Check it out here: https://www.knowyouroptions.com/loanlookup
If you already know the name of the bank or lending institution, but lack contact info, take a look at the HOPE NOW Mortgage Lender’s Directory: http://www.hopenow.com/mortgage-directory.php
Still have questions? Get in touch with one of Team Troy’s Trusted Mortgage Partners: http://nwhomesearch.com/concierge/?cn-cat=23&cn-s=&cn-pg=1
*Information Courtesy of Fannie Mae and Keep My House