When a homeowner applies for a mortgage loan modification, his or her application will be handled by a mortgage servicer. It is common for servicers to make serious mistakes while they are processing loan modification applications, causing homeowners to be denied for the modifications or to be wrongfully foreclosed upon. There are several things homeowners can do when mortgage servicers violate the rules concerning loan modifications.
Mortgage transaction parties
In order to understand the common violations that occur within the mortgage servicing industry, it is important to first understand the various parties who are involved in mortgage loan transactions.
1. Mortgagor: The homeowner who is borrowing the money, pledging his or her home as security for the loan.
2. Mortgagee: The lender who provides the loan to the mortgagor.
3. Mortgage investor: A party that purchases mortgages from lenders, providing the lenders with money they can use to offer more loans.
4. Mortgage servicer: A company that manages mortgage accounts on the mortgagee or mortgage investor’s behalf. Mortgage servicers manage loan accounts on behalf of the mortgagee or investor. The servicer is typically responsible for the following: