Lucrative Fees May Deter Efforts to Alter Loans

[ama125]

Came across this article and can't help but think there is a lot of truth in it...could explain in addition to understaffing and lack of training, why things are taking so long: http://www.nytimes.com/2009/07/30/bu...0services.html

[AzGryffindor]

Over 10 years ago I worked as a receptionist for a very small mortgage servicer. When I asked how the company made its money I was told that for each mortgage that was current we received about $8.00/mo. But, for mortgages that were delinquent the company did not receive that $8.00 but instead any fees associated with being late (late fees, inspections, etc.) were all recouped by the servicer and not the lender which made it far more profitable to service a loan that was delinquent.

[Jillian118]

hmmm.....I have learned soooo much about this industry by having gone through all this. Pretty amazing

[Fairlady]

Originally Posted by AzGryffindor

Over 10 years ago I worked as a receptionist for a very small mortgage servicer. When I asked how the company made its money I was told that for each mortgage that was current we received about $8.00/mo. But, for mortgages that were delinquent the company did not receive that $8.00 but instead any fees associated with being late (late fees, inspections, etc.) were all recouped by the servicer and not the lender which made it far more profitable to service a loan that was delinquent.

Hate to sound stupid but I am really clueless about these things. What is the difference between a lender and servicer? The main reason I ask is that I need to send a 4506T and hardship letter through Naca to my servicer. I am not sure if I should put BofA as the servicer or if it is another company. Can anyone tell me the difference and how I can find out who my servicer is? I'd really appreciate it.

[ama125]

Originally Posted by Fairlady

Hate to sound stupid but I am really clueless about these things. What is the difference between a lender and servicer? The main reason I ask is that I need to send a 4506T and hardship letter through Naca to my servicer. I am not sure if I should put BofA as the servicer or if it is another company. Can anyone tell me the difference and how I can find out who my servicer is? I'd really appreciate it.

Here you go (taken from makinghomeaffordable.gov):

1. Who is my "loan servicer?" Is that the same as my lender or investor?Your loan servicer is the financial institution that collects your monthly mortgage payments and has responsibility for the management and accounting of your loan. Your servicer may also be your lender, which means they could also own your loan; however, many loans are owned by groups of investors and these investors hire loan servicers to interact with borrowers on their behalf. Also, many lenders no longer interact with their borrowers; they too have the loan servicers handle all contact with borrowers.