Who Owns the Mortgage Note in a Short Sale?

Welcome back folks as this article is going to answer the number one question I get about short sales or should I say an “urban legend” that is constantly brought up within the Phoenix Arizona short sale process. It seems like this is a commonly asked question within the short sale process and once again, if the opportunity to add value to the Cash Now Homes knowledge base for my clients and potential clients pops up, you can be absolutely certain I will be dropping those golden nuggets on you in a hurry so here we are.

Getting started, we need to ask ourselves a few definitive questions and they are as follows to really understand mortgage notes within the Phoenix Short Sale process so please see below and let’s roll.

  • What exactly is a mortgage note?
  • Who owns the mortgage note?
  • Who is the Investor in a mortgage note?

Now that we have a framework of questions to work with let us begin by taking one question at a time and before we know it we will have put it all together when it comes to mortgage notes so hold on tight as there is some complexity to a mortgage note to include the ownership and identifying the actual investor within the note and their role.

Enough George, please just tell me what a mortgage note is? Glad you asked good people of Arizona and the exact answer is that a mortgage note is really a contract stating that the property that you purchased is the security based on the amount you are borrowing to own that property from the lender.

Ultimately, the mortgage note allows the lender the right to repossess or take back your property if you don’t hold up your end of the contract based on the monthly payments per the agreed upon contract between you and the lender. That was a mouthful wasn’t it?

In simple terms, you have a contract in place for the money you borrowed from the lender and you need to make your payments otherwise financial chaos ensues and you don’t need that headache as it will affect you and your family but never fear because Cash Now Homes is here to help you in your time of need.

Now we get to the “urban legend” which is the question of questions when it comes to a Phoenix Arizona short sale as we want to know “who owns the mortgage note?”

Well for starters, your note may been sold several times over and that can be a bit troublesome when trying to identify who actually owns it as the company you get your mortgage payment on a monthly basis from (known as the servicer of the mortgage note) may not actually own the note itself but just collects the payments so let’s see what they actually do to earn their paycheck if you will and their subsequent duties and how this relates to you as the homeowner named on the mortgage note:

  • The servicer of the note handles operations management of the loan if you will, in other words the day to day minutiae.
  • The servicer is the company that collects the mortgage payment and processes it as well on a monthly basis.
  • It will track your account balance at all times to include managing the escrow account if you have one in place.
  • Last but definitely not least, it supervises the foreclosure process if you happen to find yourself in this ‘financial abyss” and no need to go there as Cash Now Homes has the expertise to help you avoid such a catastrophic event.

So now that we have identified the “servicer” of the mortgage note, we still need to know who actually owns the note so please see below for further details:

  • The owner of the mortgage note can be referred to as the mortgage holder and simply as the note holder.
  • This note holder has the legal right to enforce the loan agreement if the contract agreed upon is broken such as missing monthly payments due to extenuating circumstances by the owner of the home.
  • The actual loan agreement consists of a promissory note and the mortgage (deed trust if you will.)
  • Please know that the holder of the note is the only party that has the absolute legal right to not only collect the debt owed for the loan but to foreclose on your home granted you don’t make the monthly payments.

Okay George, you still have not identified who in tarnation is the holder of the note so please clarify this for us, your loyal clients. Well it seems that the good people of Arizona have spoken and I’m getting to that part so please continue reading as I had to logically put the fundamentals in place so see below for more details that you will find beneficial:

  • There are a few different ways to identify the holder of the note and the easiest one is to simply call your servicer and just ask who the holder of the actual note is hence the reason I explained in detailed about the servicer of the note so that you as the homeowner can get to the “nitty gritty” if you will.
  • You can also send a qualified written request which is just a letter written to the service of the note asking them that you need to know who the actual holder of the note is. Talk about simplicity at its best.
  • Another avenue would be to contact the Mortgage Electronic Registration Systems also known as MERS if your loan is in their system so you can either call them or just check on the MERS website to find out who the holder of the loan is.
  • You can also check Fannie Mae, Freddie Mac as they have tools to do so on their respective websites as well.
  • Another reason to obtain this information is if you are thinking about refinancing or some type of modification through some of the programs available (depending on who owns the loan) so see below for details:
  • Government owned corporations such as Freddie Mac, Fannie Mae, FHA and even the VA can be very helpful when it comes time to find out who the holder of the note is.

Okay folks, at this point in time we have some really good details in case you have fallen behind on your mortgage payments and need to contact your mortgage service and in turn, find out who the holder of the loan is so now you have plenty of information to help you if you find yourself in a “financial abyss” and if so please contact Cash Now Homes as one of our representatives will be more than happy to be of assistance.

Thank you for reading our blog and the Phoenix Arizona short sale series that we have been proudly publishing for the last few weeks to help our clients understand the short sale process so feel free to contact us if you have any pertinent questions.

Regards,

George Aplicano

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(602) 770-3978

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