Finding out what company or entity owns (holds) or backs (guarantees) your mortgage loan isn't always easy. Your loan might have been sold, perhaps several times, since you took it out with the original lender. And the company that services the loan might not own the underlying debt.
Here's how to figure out who services, holds, or guarantees your mortgage loan and why you might need that information.
First, let's define the major players in the mortgage lending business.
The "lender" is the financial institution that loaned you the money. The lender owns the loan and is also referred to as the "note holder" or "holder."
Sometime later, the lender might sell the mortgage debt to another entity, which then becomes the new loan owner (holder). Loans are frequently bought and sold in the mortgage industry.
The sale of your mortgage loan to a new owner doesn't affect the terms or conditions of the original contract. The holder has the right to enforce the loan agreement, which consists of a promissory note, and a mortgage or deed of trust. The note holder is the only party with the legal right to collect the debt—and foreclose on the property—if you don't make payments.
A mortgage "investor" purchases home loans that lenders originate. Fannie Mae and Freddie Mac, for example, are investors that buy loans from lenders on the secondary market.
Mortgage guarantors, such as the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), and the U.S. Department of Agriculture (USDA), guarantee that a loan owner will get paid if the borrower defaults on the loan. Fannie Mae and Freddie Mac also guarantee some loans.
A guarantor is also called a mortgage "backer."
Mortgage holders often hire a loan servicer, which might or might not be a lending institution, to handle day-to-day loan processing activities. The servicer deals with the everyday management of the loan. For example, the servicer:
In some cases, the loan owner is also the servicer. Other times, another company services the loan.
The first step in determining who owns or backs your mortgage is identifying your loan servicer. Again, the servicer might be the same company as the loan holder, but not always.
Here are a few different ways to find out your loan servicer's identity.
To find out who your loan servicer is, check your monthly mortgage billing statement. Your servicer is the company that sends you the bill for payment.
Look at your payment coupon book if you have one. The servicer will be listed.
If you have a Mortgage Electronic Registration System (MERS) loan, call the MERS Servicer Identification System toll-free at 888-679-6377 or visit the MERS website. Your mortgage servicer's identity will be listed in the MERS system if you have a MERS loan.
If you're unsure about whether you have a MERS loan, you can also get this information from the MERS website.
Here are a few different ways to learn the identity of your mortgage holder or backer.
The easiest option for finding out who owns your mortgage loan is to call the servicer and ask who holds your loan. You can also ask who backs it. That's why you first need to figure out who your servicer is.
You might be able to find out who owns your mortgage loan online.
You can also send a qualified written request (QWR) to your servicer asking who owns or guarantees your mortgage loan. Under federal law, the servicer must respond, typically within 30 days, telling you who owns the mortgage.
You might be able to find out who backs your mortgage loan by reviewing your loan paperwork.
The following examples are just a few scenarios where you'll want to know who services, holds, or backs your mortgage.
If you need general information about your loan account, like the monthly payment amount, the next due date, or late fee information, you'll have to call your servicer.
Also, if you want to apply for assistance under your state's Homeowner Assistance Fund program (if the program is still open), you can contact your servicer to find out if it participates.
Different backers offer various loss mitigation options to borrowers. Your options often depend on what entity, like FHA, VA, USDA, Fannie Mae, or Freddie Mac, owns or guarantees your loan, and you probably have choices. For example, you can get a CARES Act forbearance if you have a federally backed loan, such as an FHA, VA, USDA, Fannie Mae, or Freddie Mac loan. Different investors offer various foreclosure alternatives, too.
But servicers don't always give accurate information when telling you about what foreclosure alternatives are available. So, you need to know who owns or guarantees your loan to know what options might be available to you. Learn what options are generally offered for your type of loan and be ready to ask your loan servicer about them.
If you're a homeowner in foreclosure, you'll want to know the holder. If you think the foreclosing party doesn't actually own your loan, you might have a defense against the foreclosure.
You'll most likely need an attorney to help you review your ability to raise this type of defense and argue it in court.
If you're having trouble paying your mortgage, a local foreclosure lawyer can advise you about what mortgage relief if available in your circumstances, help you deal with your loan servicer, and represent you in a foreclosure, if necessary.
A HUD-approved housing counselor is also a good resource for information (at no cost) about different loss mitigation options.