Inside Your Client's Loan

• Pages: 43-59

Inside Your Client’s Loan

Chapter 8

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An ideal resolution to a loan dispute is always one that avoids the

filing of a foreclosure action. Sometimes this might be accomplished

by going to the top of the bank’s chain of command to reach the

person who has the ultimate authority to grant a solution. Some-

times you may be able to work with such an individual and settle

things by just talking it out. Other times, you may still be able to

obtain a loan modification through the servicer.

Find OutWhoOwns Your Loan

The owner of or investor on your loan almost always hires a loan

servicer to manage the loan, just as a landlord may hire a property

management company to tend to the day-to-day issues relating to

the property and its tenants. This is the company from which your

client may have been receiving warnings about late payments or a

demand letter,in which the borrower is basically directed to bring

the loan current or face a foreclosure action.

However, the servicer may not be the owner of the loan. Some-

times they are the same; forexample, Bank of Americaand Chase

may service their own loans. In any case, the investor is the person

44 CHAPTER 8

or entity you want to speak with about finding a solution, as the

buck stops with them (other than the government).1

You may also call the servicer and inquire as to who the inves-

tor is; if a foreclosure action has already been filed, the “plaintiff”

in the action may be the investor. It is possible to spend years spin-

ning your wheels with a servicer to get a loan modification and

never get anywhere. The servicer may be able to stonewall a settle-

ment, claiming that it does not have “authority” to take action. It

will then tell you thatit must present information to the investor and

get back to you, yet never follow through. Cut to the chase and

contact the investor. Perhaps the investor will be cooperative and

work with you. Even if the investor is not cooperative, you should

still be entitled to meet with them, as mediation is often ordered by

the court if any party requests it.

You should ascertain the name of the owner or investor on the

loan as quickly as possible so that you may begin reaching out to

them regarding settlement proposals. (Hopefully they will not rel-

egate the matter back to their foreclosure attorney or servicer; if that

happens, you may need to seek a court order directing the investor to

communicate with you directly regarding settlement or appear per-

sonally for mediation.) Most mortgages are executed using the Single

Family–Fannie Mae/Freddie Mac Uniform Instrument applicable to

your state.2Look at the name of the lender on page 1, paragraph (C).

If this name is the same as the bank that claims to currently own your

loan, or the current name is that of the original lender’s successor-in-

interest (which is usually the company that bought the original lender

and, for the purposes of resolving the loan dispute, is the same as the

old lender), you are most likely dealing with the investor, who is also

the servicer in your particular case.

Some parties are still suspicious of the chain of title in cases

where the original lender’s successor-in-interest is claiming owner-

ship of the loan. However, it is routinely a matter of public record

1. You may find out whether your mortgage is a federally backed loan

and whether Fannie Mae or Freddie Mac is the investor on your loan by visit-

ing http://www.fanniemae.com/loanlookup/ or https://ww3.freddiemac.com/

corporate/.

2. Formsfor each state are available at http://www.freddiemac.com/uni-

form/unifsecurity.html.