What If My Loan Is Sold During Mortgage Modification?

Mortgage holders are in the habit of buying and selling mortgage loans, and this makes it hard for homeowners to know who holds their mortgage and where to make payments. The issue of which lender is the correct lender, or who is servicing a loan comes up frequently in foreclosure actions, because the proper party has to be in possession of the note in order to enforce it by foreclosure. The many times a mortgage note changes hands makes it difficult enough to make payments to the right bank, but the situation can become even more frustrating if your loan is transferred during a modification request.

Here are some tips for how to handle a transfer or sale of your mortgage while you have a modification application pending:

  • Ask that your application be escalated once you learn of the new mortgage holder.
  • Provide all documentation to the new lender that has been given to your prior mortgage holder. You cannot trust that the previous note holder transferred all of the documents. This is why it is so important to keep complete records and copies of all documents related to your modification process, you never know when you will be asked to resubmit.
  • Request written confirmation from the new note holder that they have noted the account properly, ensuring your loan has been coded for modification review.

Doing the above things should help you avoid being repeatedly told your application is with the underwater for review, but are not the only steps you should take. It is also essential to turn your case over to an experienced attorney to handle. Litigators who focus on helping debtors get out of debt are familiar with the modification procedures, including how to make sure your request goes smoothly if the loan is transferred to a new lender. Many lenders engage in the buying and selling of loans as a way to keep a positive balance on their books, but doing so should not put a homeowner in jeopardy of having their modification denied. We have helped people sort through all sorts of facts relating to their request for a mortgage modification, and will be able to help you too!

If you have more questions about mortgage modification and debt, contact our office. We can be reached by phone, or online at www.law-ri.com.

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