Banks service mortgage loans for hundreds of investors. As a part of normal servicing, investors may decide to release or transfer servicing from one bank to another company.
Servicing may be transferred on first, second or stand-alone liens. In most cases, once the servicing transfer occurs, the process ends with the current bank and the homeowner must contact the new servicer to determine what foreclosure alternatives may be available.
Attorneys and real estate professionals should advise homeowners that, similar to foreclosure, a servicing transfer is a risk that may occur at any time during the loan modification or short sale process. This is why it is important to move as quickly as possible to facilitate the workout with the bank.
Service releases and very common and happen very quickly. Service releases can happen even after a loan mod or short sale has been approved, but not finalized. If this happens to you, you should be very aggressive with the bank to make them honor their agreement before the transfer is finalized.
Our firm is dedicated to helping clients file bankruptcy, obtain loan modifications, and helping clients get a fresh start. For more information on what First Source Law can do for you, please fill out our free evaluations for bankruptcy and loan modifications.
This post was written by Gina Berg