Fannie Mae, Freddie Mac, or Some Private Mortgage-Backed Security Trust?
Almost Never the Bank To Which You Send Your Monthly Payment
One of the biggest difficulties confronting homeowners facing potential foreclosure is the difficulty of identifying who or what exactly is the current owner of the mortgage and, thus, the entity with the actual right to foreclose. Nearly always, the bank or other entity to which you mail your monthly payment check is not actually the holder or owner of the mortgage. Instead, unless you have a mortgage pre-dating the late 1990s or so, your mortgage is almost certainly owned by a trust owned by Fannie Mae or Freddie Mac, the quasi-governmental mortgage entities, or by some obscure private trust comprised of mortgage back securities, shares of which trust have been sold to private shareholders. The entity accepting your payment each month in all likelihood is a mere "servicer" of the mortgage: an entity contractually employed by the holder or owner of the mortgage to accept payments, process the funds, charge you late fees, and oversee the foreclosure process where necessary. Servicers are generally granted the rights to perform these tasks by the trust owners of the securities into which your and hundreds of other mortgages have been "bundled" by master servicing agreements or contracts, but those same agreements also limit the rights of those entities to those specific tasks. Thus, if you are receiving letters from your servicer, an entity such as Ocwen Loan Servicing, Nationstar, or even a "well-regarded" bank such as Bank of America, threatening foreclosure or other action and you wish to challenge it, you may be dealing with a mere servant of the true holder and owner of the mortgage by responding or filing a lawsuit against that entity or taking other action. Before initiating any defensive or offensive legal action regarding your mortgage, including challenging "proofs of claim" filed in by servicers in Chapter 13 bankruptcy cases (documents creditors must file in order to be paid by the Chapter 13 Trustee in a Chapter 13—and which often and falsely claim that the servicer is the actual "creditor" as opposed to the real mortgage holder), you need to find out who owns the mortgage. Really.
The Qualified Written Request (QWR): What Is It?
As described by the Consumer Financial Protection Bureau, a QWR is a letter you or someone you hire sends on your behalf to the current or recent servicer of your mortgage to request information about your account, including the identity of the actual owner. It is a much easier way to discover this information than the alternative method: scouring the Securities & Exchange Commission's EDGAR database for hours and hours and hours on end. The servicer is required to acknowledge receipt of a QWR under Section 6 of the Real Estate Settlement Procedures Act (RESPA) within 20 business days and to respond substantively to the QWR within 60 business days (as of this writing, before the new "Regulation X" is effected in January, 2014) , or it is liable for damages. The QWR is legally effective for first mortgages only and not for second mortgages or home equity lines of credit—but the servicers of such mortgages will often respond to QWRs regardless.
What Do I Put Into a Qualified Written Request?
The QWR must contain specific information and be sent to a specific address in order to work properly. First, it must be sent to the address designated by the servicer for QWRs, not simply to your usual payment address or even to the corporate headquarters of the servicer, although they are sometimes the same address. It is not always easy to locate this address as some servicers seem to go out of their way to bury this information on their websites and other documentation, but a little digging should reveal it. The QWR should also be sent via certified mail with return receipt requested in order to give you documentary evidence of the letter's receipt via USPS tracking should the servicer fail to respond and a claim for damages need to be pursued. Be sure to send it on a "stand-alone" basis, not stuffed into the envelope with your monthly mortgage payment, etc. The letter should also explicitly state that it is a "qualified written request under Section 6 of the Real Estate Settlement Procedures Act (RESPA)." Other than that, however, the QWR need not take any other particular form or adhere to any formal style or presentation. You simply need to include a request for the specific information you are seeking to discover, including the holder or owner of the mortgage. You can also use a QWR to request a payment history, a history of late or other fees applied, and other information regarding the servicing of your account. The RESPA statute does not require a servicer to respond to any and every informational request you might make, but some servicers will respond to QWRs in an expansive manner either because they have made a decision to simply take the path of least resistance or because their employees don't know any better.
Qualified Written Requests: The Bottom Line
The bottom line is that you have a right to know who really owns your mortgage. Only an extreme minority of mortgages originated since 2003 or so have not been securitized and are actually owned by the bank or other entity originating the mortgage. A QWR is a simple way to obtain this information so long as you can afford to wait 60 days or so to receive it. If you are a Michigan resident and would like to explore your options for a Chapter 7 or Chapter 13 bankruptcy with an experienced Michigan bankruptcy attorney, please contact us at (866) 674-2317 or click the button below to schedule a free, initial consultation.
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