When you got your home loan, you probably went through a bank or through a mortgage broker. Once your loan was accepted, the bank or broker that initiated the loan might have sold the loan to another bank. Many mortgage banks hold loans as investments--paying money to the bank that originated the loan and holding onto the loan to make a profit off of your monthly payments.
But not all mortgage banks actually "handle" the mortgage payments made on the loans they hold.
Many mortgage banks employ professional "non-bank" companies or entities called Mortgage Servicers. Some of the largest mortgage servicers are Nationstar Mortgage, LLC (doing business as Mr. Cooper), Freedom Mortgage, Cenlar FSB, and Roundpoint. But there are many, many others around the country that do this kind of work.
Most mortgage servicers contract with mortgage holders to "service" the loan--basically, to do all the things you would expect the mortgage bank would do: send you monthly statements, accept and process your payments, handle your escrow account (for payment of your property taxes, home owners' association dues, and home owners' insurance, among other payments), and keep an accounting of your loan balance.
In exchange for servicing the loan, most mortgage servicers get paid by the mortgage banks in various ways. Common arrangements include annual payments that are a percentage of the value of the loans serviced, payments that are a percentage of the monthly payments for the loans serviced, flat fees, or a combination of all of these methods of payments.
After the financial crisis of 2007-2008, we all learned that mortgage banks had made risky bets by packing risky home loans into securitized "investments" and selling them to investors. When those investments went bust, our economy melted down.
Once the economy melted down and people started losing their jobs, they started having a hard time making their mortgage payments. This, in turn, led to a significant uptick in foreclosures.
Starting around 2010 and onward, we saw a huge increase in mortgage foreclosure abuse. Government agencies and consumer protection attorneys like Holmes Law Firm proved in court and in investigations that mortgage banks were breaking the law, and the result was billions of dollars in fines and settlements and hundreds of thousands of lawsuits.
Sick of getting sued because they could not follow the law and regulations for mortgages, many banks stopped servicing their own mortgages. So separate mortgage servicing companies stepped up. But those mortgage servicing companies are often just as bad--or worse--at following the law than the banks were.
Quite often--if not most of the time--it is the mortgage servicer, not the actual bank that holds the loan, that is responsible for the abuse.
Thankfully, there are tough penalties for breaking mortgage laws and regulations. And an experienced, aggressive consumer protection attorney can often get you substantial compensation for mortgage abuse--either by suing the bank and its servicer in a foreclosure or by suing the servicer directly.
If you've been the victim of mortgage abuse, contact Holmes Law Firm today. We will evaluate your case at no charge, and if we take you on as a client, there's no up front fee. Instead, we'll work hard to sue the bank and, if necessary, its servicer and force them to pay you money for the harms caused and, potentially, pay our attorneys' fees directly so you do not have to pay us anything for your claim.