The lender or originator in a foreclosure is the bank/mortgage company which lends the homeowner money to purchase a home. The loan servicer, however, is different. It is the company that handles the management of the mortgage account. In some instances, the lender is also the loan servicer -- however, it is typical for the lender to sell the right to service the loan to another company (the loan servicer). This sale is often referred to as "transfer of servicing rights." That servicer in turn can also hire another party, referred to as a "subservicer," to take on the mortgage management duties. Homeowners are sometimes surprised and confused by notices of these kinds of "transfer of servicing rights," although they are commonplace practices.

How do loan servicers manage a mortgage account?

Loan servicers can manage mortgage accounts by:

• collecting the homeowners monthly payments;
• processing loan modification/short sales on behalf of homeowners;
• communicating with homeowners regarding their accounts;, and
• sometimes even handling the foreclosure case when a default occurs

What should a homeowner look out for when a loan servicer initiates a foreclosure?

While managing the mortgage account, loan servicers sometimes make errors such as:

• incorrectly applying homeowner payments to a wrong acocunt;
• overcharging fees to a mortgage account;
• purchasing expensive homeowners' insurance for a homeowner's property, even when there's already an insurance policy in place;
• improperly starting a foreclosure case when there has not been a default; and
• initiating a foreclosure case at the same time that a loan modificaiton application is still in process', and

It is important for homeowners to thorougly audit their mortgage accounts and identify any such errors, as they can be used as part of their defense in the foreclosure case. At The Law Center, we are a team of specialists that are passionate and up to date about the foreclosure process from start to finish and helping homeowners at the highest level. Our staff and attorneys approach each client and each property as a new challenge, one that requires thorough analysis, zealous representation, and thoughtful strategy. It’s your home, let The Law Center help you defend it.

Call us now and speak with a foreclosure expert on how you can make the foreclosure process work for you -- not against you. (312) 600-8815

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