Mortgage forbearance provided a lifeline for millions of homeowners in the U.S., especially during the most difficult months of the COVID-19 pandemic. But with over 2 million homeowners fast approaching their forbearance end date, many will have to decide what their next steps would be.
Some of the possible options may include a forbearance extension, repayment of past due amounts, a payment deferral, a modification or refinance, short sale, or deed in lieu of foreclosure. Still, many people are getting ready to exit their forbearance, and they’re looking at loan modification as an option. With the help of Alabama loan modification lawyers, you can successfully go through the loan modification process smoothly, especially where you’re facing difficulty understanding what to do or how to respond to a non-responsive or law violating mortgage servicer.
Where Should I Start with My Loan Modification Process?
The first thing is to figure out who is your mortgage servicer and who owns your mortgage. Sixty to seventy percent of mortgages are federally backed, and anyone looking at mortgage relief options should determine who owns their mortgage.
Why is it important to know who owns your mortgage?
If your mortgage is federally backed you may be eligible for extra protections under the CARES Act. If your mortgage owner is Fannie Mae, Freddie Mac, FHA/HUD, VA or USDA you have a federally backed mortgage. A big advantage for homeowners who have a mortgage owned by Fannie Mae, Freddie Mac, FHA/HUD, VA, or the USDA is that these entities publish your mortgage relief options on their websites. So when applying for a loan modification you have at your fingertips the loan modification eligibility requirements which are applicable to your mortgage. These are the rules that your mortgage servicer will use in determining if you qualify for a loan modification.
What is a mortgage servicer?
The very first step to determining who owns your loan is identifying your loan servicer. Sometimes the servicer may also be the owner (holder), but this is not always the case. In many cases, a mortgage owner will retain a loan servicer who might or might not be a lending institution.
The job of the servicer is to handle the day to day management of the loan like:
- Collecting and processing your monthly payments,
- Tracking your account balance,
- Managing your escrow account if you have one already,
- Evaluating the homeowner for loss mitigation options.
Other reasons you may want to know who services your mortgage include:
- You may need to know some details about your loan account like your next due date or late fee information – you will need to contact your loan servicer
- You’re having challenges keeping up with your loan repayments and want to take advantage of mortgage relief programs like loan modification, forbearance – you’ll have to contact your loan servicer
- You’ve already fallen behind on your payments and want to negotiate alternatives to foreclosure – talk to your loan servicer
Who is your mortgage servicer?
Some of the common mortgage servicers like Quicken Loans, Wells Fargo Home Mortgage, Caliber Home Loans, Mr. Cooper, Carrington Mortgage Services, PennyMac, and Fay Servicing can discuss alternatives to foreclosures like a loan modification with you. You will have to contact your mortgage servicer directly about your mortgage relief options.
You can find out the identity of your loan servicer by checking your monthly mortgage billing statement. Since they’re responsible for sending you the bill for your payment each month, their name and address will be located on your monthly billing statement.
You can also look at your payment coupon book or call the Mortgage Electronic Registration System, Inc. (MERS) Service Identification System through 888-679-6377 or visit their MERS site to locate your servicer’s identity.
How do I find out who owns the mortgage?
When your mortgage loan was approved and funded, you probably got a letter explaining who owns your loan. But if you didn’t save the letter, you still have a way of knowing who owns your mortgage. There are several ways you can find out who owns the mortgage, including:
Look it up on their website.
Click here to find out if your mortgage is owned by Freddie Mac
Click here to find out if your mortgage is owned by Fannie Mae
Insert your name and address to look up your mortgage on their respective sites.
Call your mortgage company and ask.
You can also call your mortgage servicer and ask them who owns your mortgage. Use the techniques mentioned earlier to get your servicer’s contacts.
Write to your mortgage company.
Another option is to write a letter to your mortgage company and ask who the owner of your mortgage is.. This link provides an example of a letter requesting information to a mortgage servicer.
Your mortgage statement will normally designate a specific address to send all requests for information. It is important to send all of your requests for information to the address designated by your mortgage company.
How does loan modification work?
A loan modification may involve changing the mortgage terms, e.g., changing an adjustable rate mortgage to a fixed rate mortgage. It could also mean extending the mortgage term, for instance, from a 30-year term to a 40-year term.
Additionally, it may involve reducing the interest rate either permanently or temporarily. Your bankruptcy attorney can help you apply for a loan modification.
Get legal advice from a skilled debt relief professional.
It can be beneficial to know who owns and services your mortgage loan for a variety of reasons. That way, you know who to approach for a loan mod now that your forbearance is coming to an end. Your loan modification lawyer in Tuscaloosa will help you get a better deal as well as terms and conditions for your loan modification.
The first loan modification offer may not be the best offer available. Before accepting such an offer, it’s best to retain an experienced Alabama attorney who will devote their time to your case and help you through the process.
Bankruptcy attorney Scott Allums is an experienced lawyer helping families seek debt relief in Tuscaloosa, Bessemer, and throughout Alabama. His job is to help people with loan modification issues, including those exiting or just about to exit their forbearance. Call us at 205.426.7080 today for a FREE case evaluation with our experienced attorney and start regaining control of your finances.