Press Release

Rancho Cucamonga, California, July 13, 2009- Most consumers are surprised to learn that there are many players in the mortgage lending process. Consumers often hold the mistaken belief that the only parties involved are themselves, as borrowers, along with the lenders that originated their loans. In reality, there are many players in the mortgage lending process, some that interact directly with the homeowner and others who operate behind the scenes.  It is important for borrowers to understand this set up because this set up can have the effect of insulating certain parties from any wrong doing of the originating lender.

The basic parties that are generally involved in the mortgage lending process are:

• The Mortgage Broker: Mortgage brokers arrange the loan, either working on behalf of borrowers, on behalf of the lender or even on behalf of themselves.  It is important for the broker to clarify his or her relationship with the borrower at the outset of the mortgage lending process. 

The Real Estate Agent: Real estate agents sell real estate by listing property in public listings for sale. They most commonly represent the seller of the property and are paid a portion of the sale price.

• The Appraiser: The appraiser determines the value of the property.  Appraisal costs should be stated on the HUD-1 settlement statement.

• The Closing Agent or Attorney: Lenders often hire a mortgage closing agent or attorney to conduct the mortgage closing or settlement. 

• The Escrow Agent: The escrow agent generally holds all loan proceeds that are not distributed at the closing of the loan.  Usually, disbursement of proceeds is governed by an escrow agreement that the lender or escrow agent may have drafted.

• The Mortgage Originator vs Mortgage Holder: The lender whose name is written on the HUD-1 statement, mortgage note and all other original loan documents is the loan originator. If the mortgage originator never sells the loan to another party, then the mortgage originator remains the mortgage holder as well. The right to foreclose is held by the mortgage holder.  Oftentimes, the mortgage originator sells the mortgage on the secondary market.  If the mortgage originator pools together and sells many mortgages to a large group of investors, then a trust agreement is made so that the mortgage holder is a trustee for the large group of investors. This process is called securitization. One important effect of securitization is on the consumer’s right to raise claims and defenses against note holders.  The mechanism of securitization insulates certain parties from any wrongdoings of the original lender.  Whether or not a consumer can raise a claim against note holders in a securitization is determined by a complex analysis.

• The Mortgage Servicer: The mortgage servicer interacts directly with the homeowner, collecting monthly payments and holding money in escrow to pay homeowner’s insurance and property taxes.  The service provider also negotiates loss mitigation plans with defaulting homeowners.

• The Lender’s Foreclosure Attorney: The lender’s foreclosure attorney is given authority from the mortgage holder and is usually hired by the mortgage service provider. 

More information is attainable at: http://www.stonehavenlaw.com
e-mail:  info@stonehavenlaw.com

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