To come home after a long day, and reside in it with the knowledge that it is your home in the truest sense is a feeling that is beyond words. There is the satisfaction of owning the roof that is sheltering you and your beloved family members, the joy of knowing that you can create a lifetime of memories right there as you need not move, and the pride that comes from having achieved the dream of owning a house. The one price to pay for all this is mortgage. You must have a thorough knowledge of everything pertaining to your home mortgage loan, including who you owe your payments to.
That’s right. You could very well pay your mortgage money to a lending service that isn’t the one you borrowed from initially. In fact, this practice of transferring mortgage loan servicing, called Mortgage Assignment, is quite common. Everything related to your mortgage, from the documents, outstanding dues, to tax details will be handed over to the new company by your original lender. This may happen multiple times throughout the payment tenure of your loan, depending on the particulars of your loan and other factors.
So, what should you know about this practice? How does it affect you? What can you do about it? These are some of the most common questions that pop into every borrower’s mind once they come across the term and realize what’s happening. You’ll find the answers to those questions as you read below.
Details Of Mortgaging For Starters
So, this is your first time buying a property, and you’re excited about the entire process. You approach a bank or another financial institution that lends mortgages loans out, and you’re quickly inundated with a lot of unfamiliar terms and jargon that leaves you confused. You hesitate about your decision now because you don’t know exactly what you’re getting into with the mortgage market, let alone the associated Mortgage Loan Assignment Services that your lender is likely engaging in.
Worry not, because here’s a lowdown on the basics of the mortgaging process itself that will help clarify the situation for you so you can go ahead with your application for it.
Essentially, a mortgage is an agreement that a borrower makes with a property loan lender that is legally binding that determines their ability to repay the loan amount. It comes with a term limit, which is the total duration for which the borrower will be repaying the loan, the interest percentage over the principal amount, and specific fees attached to it.
2. Loan Documents
Paperwork is the proof of any transaction and property loans come with their own. Whether it’s to add-on mortgage assignment support services or simply carry out a regular loan-related process, you’ll be dealing with a lot of important legally-binding documents that enforce the terms and conditions of the applicable mortgage.
There are two documents that are of primary importance: the Deed of Trust, also referred to as simply “a mortgage “ in common parlance, and the Promissory note.
The Deed of Trust establishes the fact that your property serves as the collateral for your loan, or in other words, provides security interest for it. By making your property the collateral for the loan, you give the right to the lender to seize it should you fail to make your agreed-upon payments to the lender. It’s one of the documents that the assignment of mortgage services requires during the transfer.
The Promissory note is essentially a formal document providing proof that your mortgage loan exists and that you’ve promised to repay it according to the terms and conditions laid out prior to signing the document. It also mentions the steps intended to be followed to pay the loan back. This document is most useful when you’re getting a loan from a financial source that isn’t a bank. Even individual lenders can issue promissory notes. Their effectiveness from a legal perspective lies in between an IOU and a loan contract.
The difference between an IOU and a Promissory note is that the former only mentions that someone owes some amount to someone but doesn’t go into the particulars of the deal like the latter.
Mortgage Loan Assignment services will transfer both these documents to the new loan service provider. Thus, with the promissory note in their hand now, you, as the mortgagor, will now owe this entity the remainder of your loan payments. The concerned authorities will endorse the note, or sign it over in other terms, to the new servicer. In case the note is endorsed in blank, it gets turned into a bearer instrument. Once that happens, anyone who has the note will become the presumed owner.
The county recorder office records the deeds of trust and also maintains records of any mortgage assignment transfers that happen to these documents.
3. The MERS Mechanism
Doing actual paperwork is a cumbersome process, with the possibility of loss of important papers. And when dealing with property whose worth could be in the millions, such a possibility of loss cannot be entertained. The digitization of documents is an advantage of the digital era of today, helping maintain such important documents safely and securely to be accessed at any time and anywhere.
The coalition of banks, recognizing the challenges of physical loan paperwork and the solutions to it provided by digitization, created the Mortgage Electronic Registration System (MERS), Inc. It is used to keep track of the link between borrowers and lenders.
With MERS, mortgage assignment becomes a breeze. Lenders no longer have to do separate assignments every time a loan is transferred. The record thus kept is of vital value as it informs as to who the owner of the debt is and has the right to initiate the foreclosure process. It also keeps track of the endorsements of promissory notes.
4. Assumed Mortgage
The facility to transfer mortgages doesn’t just exist between two loan service providers. Borrowers too can transfer a mortgage from one another. When this happens, it is called an assumed mortgage. Hire assignment of mortgage services experts for the transfer as they’ll get it done accurately and efficiently, removing the burden of the paperwork and associated processes. You can use the assumed mortgage facility when you face difficulties in repaying the loan amount and someone else will take over the task.
Companies use this effective tool to repay debts as they can easily let one subsidiary of theirs handle the repayment when the primary one is facing closure or restructuring.
Lenders are typically against this practice as it becomes difficult for them to determine the new borrower’s capability to repay the loan amount after the assumed mortgage assignment process happens. They might have to do some background research which will add to their costs as well.
The Requirements For Assignment of Mortgage Services
There are a lot of parameters to consider when it comes to property loans. Some properties will have land attached to the loan while others will only have the structure, like with an apartment in a high rise complex. The foreclosure process may also involve the possessions that the borrower owns at the time of the initiation of the process that may not have existed at the time of issue of the loan and assignment of collateral.
Mortgage Assignment support services hired by the lender must consider these, and the legal conditions that come with each. Which is why the process includes some requirements to be completed with clarity and in a fair manner.
The particulars that get included are:
- The main information regarding the mortgage. There is also the provision to include the local county recorder office’s identification numbers that are assigned to it.
- The name of the borrower
- The commencement date of the mortgage
- The date and time of the recording of the commencement
- The total original amount i.e. the principal
- Legal description of the real property secured by the mortgage based on the laws of the state the property is in. This is noteworthy as the different laws of each state make mortgage assignment that much more difficult.
On the lender’s side, there’s also the requirement to send a notice to the borrower about the transfer of the loan. The law mandates that the new service provider must send this notification to the borrower but doesn’t impose such rules on the original lender. The original lender needn’t even get any permission from the borrower to conduct the transfer.
The notification document will contain disclaimer information about who the new lender is, their contact details, the means to make payments to the new lender, etc. Mortgage assignment support services insist that you keep this notification document safe as the information contained in it will help you avoid foreclosure.
The Impacts of Mortgage Assignment
You may be surprised to know that there is little to no impact on the borrower’s side when a mortgage gets assigned. Since the process occurs in the background and only comes to the fore for you when you receive the notification, there is nothing you are required to do. It is one of the biggest positives of the entire process.
1. No Changes To The Terms Of Mortgage
There won’t be any changes made to the original terms and conditions of the loan that you’ve agreed to with the first lender. The principal amount, rate of interest, regular payments, due dates, etc., will all remain intact.
Any changes that the new lender intends to make to any present escrow account must be done under the original terms of the escrow agreement. Mortgage loan assignment services usually play a key role in these situations.
You will have some flexibility when it comes to the particulars, such as the option to change the mode of payment, go ahead with the assumed mortgage, etc. But for all of it, you must talk with the new lender and submit the necessary paperwork that’s duly signed by you.
2. Taxation & Insurance
Just like with the other aspects of the assignment process, taxes and insurance-related background processing for the property(ies) linked to the mortgage are handled without requiring any intervention from your end. It’s, however, natural for escrow account holders to be concerned about both as it’s processed by the lender during the tenure of the loan. The assignment of mortgage services will handle the minutiae effectively, so there’s that relief as well.
Basically, it’s the job of the original lender to provide the address of the new loan servicer to the local tax authority for the purpose of billing taxes. This information is to be given once the assignment process has been completed. The original servicer also does the same with your property insurance company wrt your property insurance.
However, it is recommended that you verify the information despite it not being necessary. Once you receive the notice about the mortgage assignment from your new servicer, contact them for verification of these details. Learn the contact information of the person you should get in touch with for queries regarding this, and ascertain if the new servicer will accept your mode of payment or if they have other options that will work better for you.
Such verification of your mortgage information will help you with making correct payments and avoid getting scammed, and build a good credit score in the process.
Outsource Mortgage Loan Assignment Services For Hassle-Free Results
Are you a mortgage loan servicing company that has some assignment requirements? Are you a loan servicing company that has just received a mortgage assignment offer that you need help with? Or are you a borrower who wants an assumed mortgage assignment to happen?
It may seem routine and easy enough to get it done by yourself, but the cost of a mistake due to workload on employees or an untoward incident will be expensive. It won’t just affect you but everyone involved with the property and documents.
The solution is to hire an assignment of mortgage services experts for the job. These professionals are provided by your outsourcing agency and will get the assignment job done with the accuracy, speed, and aptitude needed for it. They’ll cover all the tasks involved in the entire assignment pipeline, including liaising with concerned government offices and third-party stakeholders like insurance.
As they already have the required personnel, equipment, processes, and contacts for assignment, external assignment agencies will save you money on the entire lifecycle. You needn’t hire specialized personnel for the same, nor buy the necessary support equipment/technology that will blow your budget and reduce profit margins significantly.
A virtual assistant for assignment of mortgage support will handle the tasks from a remote location over the internet, adding even more convenience to you. You only need to sign some documents whenever they arrive at your doorstep.
Select your service provider with some background research and you’ll have a seamless assignment experience that benefits both your business and customer or the new payee as the case may be.
1. How long will it take to receive the notice of mortgage assignment from the moment of transfer?
The time taken for the new servicer to dispatch the notice mail after completion of mortgage assignment varies based on many factors. If sent via email, the notice will arrive instantaneously, but via regular post, the document will take a long time depending on the processing of the postal service. The dispatch time also depends on how fast the new service provider can process the paperwork. Interstate assignments take time due to the management of different state laws regarding the process.
2. How will mortgage assignment affect my property value?
The effect mortgage assignment has on property value is practically nil. Since the parameters of the loan itself don’t change, whatever the value was of the property before the transfer will remain the same. However, some people may see it as an opportunity to negotiate a lower price based on people’s ignorance of the process. That is artificial and has no actual bearing on the actual value.
3. What advantage does the new servicer gain with mortgage assignment?
Mortgage loan providers buy mortgages from other agencies because they gain the opportunity to foreclose a property in case of failure by the borrower to repay the loan, and to make a profit on the money paid via interest and fees. They avoid the steps involved with issuing a fresh loan and get another with all of those things done already.
4. How does a virtual assistant for assignment of mortgage support the process?
The world has shifted to running via the internet, and every industry utilizes it to conduct its business. The mortgage industry is no different, employing every software tool available to streamline its operations and improve efficiency, thereby improving profits. Virtual assistants also utilize this resource to more effectively assist in the mortgage assignment and other required processes. The client can directly interact with the virtual assistant via a portal like Skype and the assistant will conduct all the necessary tasks at their agency remotely. The client receives the results via online transfers as well.