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Highlight Updates Identify the Critical Parties

Every mortgage transaction brings together a variety of actors. Some are directly involved with the homeowner while others operate behind the scenes. Some appear on the stage at the beginning of the process. Others enter the scene when the homeowner makes payments or defaults. Section 1.3, infra, provides a detailed description of various parties to a mortgage transaction.

However, for purposes of first steps, it is important to identify the loan originator, the current loan holder, and the current servicer. The originator is the financial institution that originally provided the loan to the borrower and is typically listed as the payee on the note. The current loan holder is the party that has the present right to receive payments on the note and initiate a foreclosure. Sections and 3.2, infra, discuss how to compel disclosure of the current loan holder, and §§ 3.2 and 8.2, infra, discuss the requirement that the borrower receive a transfer of loan ownership notice. The servicer is the intermediary between the current holder and the borrower. The holder typically delegates significant authority to the servicer to resolve delinquent loans and prosecute foreclosures. The federal RESPA statute requires that the borrower receive a transfer of servicing notice.8 In addition, borrowers can usually find out the identity of their servicer from the Mortgage Electronic Registration System’s online database.9

Finally, the advocate should learn the identity of any government insurer or guarantor for the loan. This may be one of the three federal insurers: FHA, the VA, or RHS/USDA.10 It could also be one of the Government Sponsored Enterprises (“GSEs”), Fannie Mae or Freddie Mac.11 These entities publish detailed guidelines describing loss mitigation options available for homeowners facing foreclosures. Servicers of these loans must follow designated procedures to review homeowners for eligibility for these options. Similarly, the identity of past servicers can be important. From early 2009 through 2016, the overwhelming majority of mortgage servicers were required to review borrowers facing foreclosure for modifications under the Home Affordable Modification (HAMP) program.12 The evaluation of defenses to foreclosure may include assessing whether the borrower was evaluated appropriately for HAMP options in the past.