Comments on: For All Borrowers: Who’s Servicing Your Loan?

By: loanswithjorge

loanswithjorge — Fri, 28 Sep 2012 14:20:44 +0000

I am going to have to disagree with mpick76.

Banks use depositers money to lend. In addition, files that qualify for sale on the secondary markets are sold in order to create liquidity…therefore, now they have the cash to lend again.

Banks charge FEES (like lenders) to create the loan, plus collect a premium on the sale of the loan due to the projected value over the next 30 years of payment.

ALL banks/lenders need to be held to the same REGS regardless of size, and if you have anyone handeling loans, they should conform to the SAFE act which right now, BANKS (S&L’s) are not, because thier LOAN OFFICERS are NOT required to TESTED. It is impossible for anyone to know the LAW unless your obligated to comply.

I can only say one name…Washington Mutual. They were one of the largest contributors to this nightmare, and they were a BANK (S&L).

By: loanswithjorge

loanswithjorge — Fri, 28 Sep 2012 14:07:07 +0000

Though it may be a good point, that would only/should apply if they are BUYING IT…what is happening is that service companies do just that…only service and do NOT really have invested interest outside of the fees they would collect.

Again, as long as the borrower pays…everything is smooth. It is NOT until the borrower doesnt pay is when we see inconsistencies with these loans and how the data is handled.

By: peekaboo

peekaboo — Thu, 27 Sep 2012 03:03:02 +0000

magie.passaro
I believe if the suggestion I made was in place you would not have had a bad experience when your loan was transferred. Take a look at it and let me know if you think it would have helped.
peekaboo

By: Moderator

Moderator — Wed, 26 Sep 2012 18:30:14 +0000

Welcome to Regulation Room, loanswithjorge, and thank you for your thoughtful comments. Having servicers call borrowers who make payments to an old servicer is an interesting idea. Can anyone in the industry tell us whether this is a common practice currently? Are there any costs associated with this that might be passed on to consumers? What do other users think?

By: peekaboo

peekaboo — Wed, 26 Sep 2012 17:24:49 +0000

Thanks for your question.
I believe the transferring servicer should not be allowed to contact the borrower subsequent to the transfer date for any reason. If contact is necessary such as to follow up on an NSF the new servicer should be required to make the contact on behalf of the old servicer. Any requests to borrower to send another payment, for example, should come from the new servicer and funds should be sent to the new servicer. This will ensure that the borrower will not get caught up in a dispute between services.

By: loanswithjorge

loanswithjorge — Wed, 26 Sep 2012 15:05:36 +0000

In response, the CFPB is surely on the right track and I understand that added stress on the company, but as much is added to the consumer. As mentioned in the TIME FRAME allocated to such a transfer, 15 days in my eyes is short and should be at least 30-45 days. Why, simple…most mortgagor’s pay their mortgages “Once every month”, so what is happening is that the burden of making an adjustment in 15 days is left to the mortgagor which is unreasonable. As a mortgagor, I would “ALWAYS INVESTIGATE” any/all changes to who recieves my payments, and 15 days is just not sufficient. So, to RESOLVE the issue, extend the NOTICE TIME to 30+ days, and should the mortgagor continue to make the payment to the OLD servicer, PICK UP THE PHONE (or put them on the same system… more »

…that calls consumers for political purposes or collections until the contact is made) AND MAKE CONTACT WITH YOUR CLIENT, AS YOU HAVE PROFITTED FROM HIS/HER PAYMENTS. In addition, a letter explaining that any future payments MUST be made to the NEW servicing company to avoid additonal penalties being assessed to your account…basically 2 letters and a phone call to those that didnt get it or do NOT understand. « less

By: loanswithjorge

loanswithjorge — Wed, 26 Sep 2012 14:52:06 +0000

In response to the EXCLUSIONS mentioned in (§ 1024.33(b)(2)) and the process of UPDATING BORROWERS, I recommend it to be updated as so… In any event, where the servicing of a mortgage is transferred, sold, assigned, and/or other from the original mortgagee that will change ANY information pertaining to the payments of a consumer loan, the servicer must provide the “Updating Borrower” letter regardless of how the servicing is contracted. It shall be the responsibility of the mortgagee that DECIDES TO SELL THE SERVICING RIGHTS, to create a documented trail of the transaction that is visible to consumers and provide ANY/ALL methods available to the consumer that ensures all payments are directed to the appropriate department, company, contractor, affiliate and/or other that… more »

…will provide services on the behalf of the original mortgagee. (My point is simple, lenders DECIDE to sell the service, to who or why is irrelevant, what is important is that they must retain some form of record that creates a paper trail that can be followed by any competent individual, especially the mortgagor. If you own a business, wouldnt you want to make sure your client is sending the payments to the right place to make sure YOUR getting paid?) « less

By: hotblazer

hotblazer — Sat, 22 Sep 2012 16:39:34 +0000

I disagree with the “send it back to the borrower” idea. This does not make sense and does not benefit the borrower. This will only incur late fees to the benefit of the servicers. The borrower should be able to send payments to the old servicer up to 60 days after the transfer date without fear that the payment will not be applied. The borrower should only be concerned with making the payment on time. The old and new servicer are already in a contractual agreement, so tranferring the payment from the old servicer to the new servicer is a simple electronic transaction. It is applied on the same day the old servicer recieves the payment from the borrower. So this talk about sending payments back to the borrower is detrimental to the borrower, this is against the entire purpose of… more »

…the CFPB protecting the borrower. Do not send payments back to the borrower! The old and new servicer shall implement policies and procedures to ensure the payment is posted correctly by either servicer. « less

By: Moderator

Moderator — Sat, 22 Sep 2012 02:09:18 +0000

Hi peekaboo, thank you for your comment. Are you saying that you support CFPB's proposal in the section on getting info to the new servicer, which would require old servicers to forward payments received up to 60 days after the transfer to new servicers? It sounds like you're concerned that borrowers could have both the old and new servicers demanding payment for the same month. Do CFPB's other proposals on transferring information to new servicers solve that concern, or do you propose an additional layer of protection?

By: peekaboo

peekaboo — Fri, 21 Sep 2012 05:08:50 +0000

I believe that RESPA should be modified and mandate that the servicer acquiring servicing become responsible for all outstanding payments as of the day of transfer and all payments received by either the selling or purchasing servicer on or after that date. The selling servicer should be legally prohibited from contacting the borrower on a transferred loan for purposes of collecting a payment after the transfer date. This prohibition would apply to collecting on NSF checks as well. The purchasing servicer should be obligated to reimburse the selling servicing for NSFs and perform the function of collecting NSF payments. If the borrower maintains that a payment was made to the prior servicer it is the responsibility of the purchasing servicer to collect from the selling purchaser. I am in favor… more »

…of requiring the selling servicer to return any payment not processed as of the transfer date or received after the transfer date to the borrower. The transfer letter should spell this out for the borrower. Fines and penalties should be incurred by the selling servicer if the servicer processes a payment on a transferred loan after the transfer date. Borrowers can obviously provide the necessary information as to who cashed their payment check and when. This can easily be enforced by review/audit of payment and cash deposit records. Any unprocessed payments held at the time of transfer or received after must be forwarded to the purchasing servicer for processing.

Purchasing servicers should not be allowed to pass the buck to the prior servicer. They should be required to make good with the borrower and settle with the selling servicer however they can. The business risk of not being able to collect from the selling servicer should be taken into account as part of the purchase and sale contract. The borrower should not be caught up in an argument between seller and buyer.
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