Do You Know Who Owns Your Mortgage?
March 27, 2009 by Tisa Silver
Filed under Finance
A home is the single largest investment most people will make in a lifetime. Wouldn’t it be nice to know who owns the mortgage?
Photo by woodleywonderworks, courtesy of flickr
Your monthly mortgage statement may come from the lender you bargained with, but that doesn’t mean your lender owns your mortgage. They may service the loan instead.
Many lenders, through a process known as securitization, sold mortgages to third parties as investments. Mortgage payments were used to provide a stream of cash flows to investors who purchased the new securities.
Like all securities, as long as there is a market for them, they can be bought and sold. So your mortgage could have been owned by several banks before landing in the hands of its current owner.
A great place to start looking is with government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. If you visit their Web sites and enter some information about your home, then you can find out if either entity owns your loan. Here are the links: Fannie Mae and Freddie Mac.
If you would like to speak to someone, you can call Fannie Mae at 1-800-7FANNIE from 8 AM – 8 PM and Freddie Mac at 1-800-FREDDIE between 8 AM – 8 PM. All times are Eastern Standard Time.
Both sites provide information about the new “Making Home Affordable” campaign which offers tips on refinancing and loan modifications.
Yep, my mortgage is held and serviced by the bank that originated it. Guess I’m a keeper, and probably an anomaly in the financial world.
The issue of who owns the mortgage is a very important one. It will be the reason most of the voluntary mortgage modification programs fail. The Pooling Servicing Agreements between the servicer and owner of the mortgage don’t authorize the servicer to modify the mortgage. The Making Home Affordable campaign does not require the servicer to cooperate. While the PSA does not allow them to cooperate, it is a circle that needs to be broken. The solution is judicial modification of mortgages.
Your mortgage was not sold to investors – only a pro-rata right to a “pool” of loans was passed-through to investors. Investors do not own mortgages. The security underwriter continues to keep your mortgage on it’s books. Only the security underwriter bank owns your mortgage.
Wow Jim, that is rare!
Thanks for the comment Elle. The point in this post was that loans were sold off as investments through the process of securitization– not that the mortgages were sold directly (or in their entirety) to individual investors. The packaging and underwriting parts are included in the securitization process and the resulting securities were then sold to investors.