Who owns my mortgage?
Q: Dear Mr. Gumbinger: Who owns my mortgage and why does someone else service the loan?
I was told by Fannie Mae over the phone that they own my loan. When I went into the loan lookup it said Fannie Mae does not find a match, therefore, they do not own the loan. How can this be? This has happened many times over.
I have been told by my servicer that both Wells Fargo and Citibank own the loan. Something is wrong.
A: The owner of the loan is most often the "investor" -- the entity who put up the actual funds to make your mortgage happen. This may be the original party for your transaction, such as a bank, but loans (like other investments) are bought and sold between parties, so the owner can change from time to time and could be anyone from a pension fund to a real estate investment trust (REIT) or other entity (you might actually be a part owner of certain mortgage loans in any bond mutual funds investments you hold, for example).
That said, the servicer is usually a separate entity, whose responsibility is to collect the monthly payment from you, maintain escrow accounts, and distribute those funds to other parties (local tax authorities, insurers and to the owner of the loan). For many lenders, this is beyond their capabilities or business model, and so these "servicing rights" are actually sold to other entities that make a living providing these services to loan owners and homeowners.
Some large mortgage lenders do their own servicing for their own loans and since they have the capacity, may also do servicing for other investors, too. There are also specialty "subservicers" who may be contracted for specific tasks (loan workouts, modifications, etc.) on behalf of the actual servicer.
In many cases, a large lender may be the servicing entity for large investors or guarantors of loans, like Fannie Mae or Freddie Mac. They may have even originated your loan, and since your contact would be with this entity, and all your paperwork/statements/correspondence would come from them, you might come to believe that they actually own your loan, when in reality they may have long ago sold the actual mortgage to another party but retained the servicing rights.
If Fannie Mae or Freddie Mac owns or guarantees your loan, you should be able to determine this by using the loan lookup tool at www.makinghomeaffordable.gov. If you're not there, there is also a list of lender contacts, so that you can contact your mortgage holder directly.
If you have a specific complaint you are trying to resolve with your servicer, the Consumer Finance Protection Bureau welcomes and openly solicits for these kinds of queries and does follow up on them -- you can find a complaint form and learn more about your rights and obligations at http://www.consumerfinance.gov.
More help from HSH.com
HSH.com on the latest move by the Federal ReserveThe Federal Reserve concluded a meeting today with no change to the federal funds rate and no changes to other monetary policy tools.
Mortgage Rates Radar 09/13/2016: Despite Fed concern, mortgage rates holding steadyHSH.com releases its latest Weekly Mortgage Rates Radar showing a slight increase in popular mortgage rates during the seven-day period ending September 13, as concerns that the Federal Reserve may make a move at next week's meeting have to buffeted the financial markets of late. The Weekly Mortgage Rates Radar reports the average rates and points offered by lenders for the two most popular types of mortgages, the conforming 30-year fixed-rate mortgage and the conforming 5/1 adjustable-rate mortgage (ARM).
Mortgage Rates Radar 09/06/2016: Modest jobs report leaves rates flatHSH.com releases its latest Weekly Mortgage Rates Radar showing almost no change again in popular mortgage rates during the seven-day period ending September 6, as a fair employment report for August failed to provide conclusive evidence that a move by the Federal Reserve is forthcoming. The Weekly Mortgage Rates Radar reports the average rates and points offered by lenders for the two most popular types of mortgages, the conforming 30-year fixed-rate mortgage and the conforming 5/1 adjustable-rate mortgage (ARM).
Mortgage Rates Radar 08/30/2016: Mortgage rates firm up a littleHSH.com releases its latest Weekly Mortgage Rates Radar showing a slight firming in popular mortgage rates during the seven-day period ending August 30, as Federal Reserve Chair Janet Yellen has indicated that a rate hike could happen sooner than later. The Weekly Mortgage Rates Radar reports the average rates and points offered by lenders for the two most popular types of mortgages, the conforming 30-year fixed-rate mortgage and the conforming 5/1 adjustable-rate mortgage (ARM).
Home price recovery index: Which metros have improved the most, least?Have home prices in your area fully recovered from the declines suffered during the Great Recession, or are they still struggling to make it back to the peaks they reached before the crisis?