Mortgage Servicer

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A mortgage servicer is the company that borrowers pay their mortgage loan payments to. Mortgage servicers either purchase or retain mortgage servicing rights that allow them to collect payments from borrowers in return for a servicing fee. The duty of a mortgage servicer varies, but typically includes the acceptance and recording of mortgage payments; calculating variable interest rates on adjustable rate loans; payment of taxes and insurance from borrower escrow accounts; negotiations of workouts and modifications of mortgage upon default; and conducting or supervising the foreclosure process when necessary.


Many borrowers confuse mortgage servicers with their lender. A mortgage servicer may be a borrower's lender, but often the beneficial rights to the payment of principal and interest on mortgages are sold to investors such as Fannie Mae, Freddie Mac, Ginnie Mae, FHA, and private investors in mortgage securitization transactions.

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Reluctance to modify mortgages, prevent foreclosures

In July 2009, the mortgage servicing industry received criticism for many servicers' apparent unwillingness to modify adjustable rate mortgages held by homeowners on the verge of foreclosure in the United States. Despite pressure from President Barack Obama's Administration on mortgage servicers to permanently modify thousands of loans to make them more affordable and prevent foreclosures, allegations arose that the servicers had an apparent conflict of interest which led them to stop or slow the modification process in many cases. Industry insiders and legal experts cited the lucrative fees which mortgage servicers charge to delinquent homeowners as the main reason behind the slow and difficult process of modifying a mortgage.

Accusations of "robo-signing," foreclosure document fraud

In October 2010, many major mortgage servicers in the United States came under intense media and government scrutiny for their alleged mishandling of the large amount of foreclosures moving through the court system. Allegations included foreclosures being processed with missing or questionable paperwork (including paperwork showing proper chain of title on the part of the investment bank), falsifying dates and other information in foreclosure documents and "robo-signing," the practice of paying under-qualified personnel to sign hundreds or thousands of foreclosure documents a day, often without properly reviewing the documents. Homeowners are creating sites online to discuss these issues on sites such as Face Book's "Homeowners Against Mortgage Servicing Fraud" and MSFraud dot ORG site. Many Youtube videos are available to help educate victims done by Attorney and securities expert Neil Garfield. Mr Garfield also has a Living Lies Blog site. Other sites include the Consumer Warning Network by Attorney Chris Hoyer in Florida.


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