In 2012, Chicago homeowner Agnes Tumamak was offered a trial period plan, the initial phase of getting a loan modification. Tumamak made her payments on time during the three months but never received notification from her mortgage company about the next steps in making the modified payment amount permanent.
In 2013, she tried contacting her mortgage company and learned that her loan had been transferred to another company. In contacting the new mortgage company she learned that her modification paperwork had not kept up and she was technically falling behind on her payments.
Frustrated, she contacted the owner of her loan, Fannie Mae, and met with Richard Staples, a Fannie Mae housing advisor, at a recent homeowner event. Staples reviewed her case on the spot and emailed scans of her payment history to her new mortgage company on her behalf.
In this case, the servicer acknowledged the oversight and agreed to work with the homeowner to resolve the situation. “Agnes left the event with a smile on her face knowing she’s finally making progress on the permanent modification,” notes Staples.
A “servicing transfer” is when your mortgage loan is transferred to another mortgage company (also called your servicer), which will be collecting your mortgage payments and handling your escrow accounts.
Because the volume and frequency of servicing transfers is growing, the Consumer Financial Protection Bureau (CFPB) issued servicing transfer guidance to mortgage companies in 2013 to protect consumers from potential risks, such as lagging paperwork.
“Consumers should not be collateral damage in the mortgage servicing transfer process,” CFPB Director Richard Cordray, noted in announcing the bulletin. “This guidance directs all mortgage servicers, both banks and nonbanks, to follow the laws protecting borrowers from the risks of such transfers, and makes clear that we will be monitoring them for compliance.”
When your mortgage loan is transferred, you should receive notification from your current mortgage company (the company you’ve been paying your mortgage to).
Additionally, you should be contacted by the new mortgage company with updated information about your loan and where to send your payments. If you do not hear from your new mortgage company, you’ll need to reach out to your existing mortgage company and ask how to contact the new servicer.
This is especially important for homeowners during a trial period plan since your new mortgage company needs to be aware of your situation to honor the offer extended by your previous mortgage company.
If neither company is providing you with assistance, and your loan is owned by Fannie Mae , you can contact the Fannie Mae Resource Center at 1-800-7FANNIE (1-800-732-6643) or contact a Fannie Mae Mortgage Help Center . If your loan is not owned by Fannie Mae, you can request help by calling the Homeowner’s HOPE Hotline at 888-995-HOPE.
The most important thing if you’re not hearing back from your mortgage company is to take action right away. “The sooner you reach out for help, the sooner you’ll have your answers…and the more options you may have,” Staples says.