What’s the difference between my mortgage lender and my loan servicer and which one should I contact?
If you have missed a payment or are concerned about foreclosure, you should always call your loan servicer. You can find the loan servicer’s phone number on your loan statement or payment book. Here is the difference.
Mortgage Lender – The lender provides funds for a mortgage. Lenders also manage the credit and financial information review, the property and the loan application.
Loan Servicer – Loan servicers are contracted by mortgage lenders and secondary market loan holders to manage the day-to-day payment collection and payment processing of escrowed items such as real estate taxes and homeowners insurance. They are responsible for collecting, monitoring and reporting loan payments. This is why homeowners won’t necessarily send their mortgage payments to the company that made or originated the loan.
When should I call my loan servicer?
Now! Contact your loan servicer as soon as you know you will have difficulty meeting your mortgage payments. You don’t have to wait until your interest rate re-sets or you are already behind in your payments.
What if I don’t want to call my loan servicer?
Call one of the housing counselors from the list on this website. They can guide you through possible options.
I’ve entered into a workout with my servicer and I can no longer afford it. What do I do?
Contact your servicer immediately and advise them of your situation. Explain to them what has changed with your financial situation and request a new workout agreement. If your attempts to negotiate with the lender are unsuccessful, you should contact your local housing counseling agency for assistance.
My servicer said they can’t help me because I’m not late on my mortgage. What do I do?
When you contact your servicer you will most likely be speaking with the Customer Service department if your loan is current. If this department is unable to help you, request to speak with the Hardship or Loss Mitigation departments. If you still reach a dead end, contact your local housing counseling agency for assistance.
I rent an apartment and my building is going to foreclosure. What do I do?
Once you know that a foreclosure sale has taken place, you should await instructions from the purchaser as to whom you should pay the rent. Until you receive instructions about who you should pay you should keep the money in the bank so you can pay all of the rent that is due in the event that it takes the new owner some time to ask you for it. You should ask to see documents that establish the new ownership before you pay. If you paid a security deposit to the owner who lost the property in foreclosure, that person is obligated to transfer the deposit to the new owner. If he or she fails to do this you may wish to speak to an attorney. Tenants do have rights and you should contact an attorney to find out what yours are in this situation.
Will I be responsible for any out-of-pocket expenses if I am approved for a workout option?
Some workout options do include expenses that the borrower is expected to pay, for example, recording fees for a loan modification. Because every situation is different, you should contact your servicer for more information. However, if a servicer has to start foreclosure proceedings, the legal fees that the borrower will be expected to pay can be very expensive. To avoid unnecessary legal fees, call your servicer as soon as you realize you are in trouble.
Can bankruptcy help?
If you are unable to negotiate a loan modification or some other kind of workout with your servicer you might want to contact an attorney to discuss filing for bankruptcy. Usually filing under chapter 7 of the bankruptcy code will only delay a foreclosure for a few months. On the other hand, filing under chapter 13 might prevent foreclosure altogether IF you have enough income to:
- make your current mortgage payments as they come due; AND
- to pay the past due payments (plus costs and attorneys fees) over a five year period.
If your income is not sufficient to enable you to make these payments but you have substantial equity in your home, filing for bankruptcy protection under chapter 13 might enable you to sell your home and keep some of your equity. If you wish to contact a lawyer to discuss filing bankruptcy, but cannot afford a lawyer, you can call The New Hampshire Foreclosure Relief Project at 1- 877-399-9995.
I saw a sign on a telephone pole in my neighborhood offering help for homeowners having trouble with their mortgage. Should I call the number?
Beware of scams! Solutions that sound too simple or too good to be true usually are. Unfortunately, there are people who may try to take advantage of your financial difficulty. To learn more about how to avoid being scammed, check out the foreclosure scams information on this website.
What happens at the foreclosure auction?
Typically the day of the foreclosure auction the person hired by your mortgage holder to auction your home will arrive. If you are there you do not have to let them into your house. At the scheduled auction time they will begin the auction and sell your home to the highest registered bidder. The highest registered bidder may be your current mortgage holder. The auctioneer will keep the winning bidder’s deposit money. The winning bidder is then required to pay the balance of the bid within a certain amount of time. Once the foreclosure deed is recorded, title to your home passes to the purchaser. If you do not vacate voluntarily the purchaser will bring an action in district court to evict you. In such cases it usually takes about 60 days from the date the eviction notice is served for the sheriff to lock you out of your home. Many banks and mortgage companies will be open to paying you to move voluntarily. Once you get the eviction notice you might want to discuss this with the attorney who is handling the eviction.
What happens to me once my home has been foreclosed on?
Once the foreclosure deed is filed you become a tenant of the new owner. If you have not left the property at this point, the new owner will start the eviction process.
You should also be aware that if your mortgage holder/lender receives less than what is owed to them on your mortgage from the foreclosure auction, they may still collect the deficiency balance from you.
My question is not on this list. Where can I get the answer?
Try looking through this website. You may find the answer to your question within the information here. While this site attempts to answer as many questions as possible, there are probably some that can’t be answered online and your question may be one of those. The best course of action is always to contact a housing counselor if the question is about your financial situation and your ability to pay the mortgage.