Banks Fire Up Their Mortgage Machine for a Refinancing Boom

First you need to understand the mortgage industry. The banks are the servicers not the lenders. They lend the money for the initial loan then immediately sell it to a large investor like Fannie or Freddie. You make your payment to them but they no longer own your mortgage.

The banks don’t have the money to continue holding a mortgage because they need the money back to loan it out again on new loans next month. Occasionally they will sell to another investor who may service their own loans in which case you might get a letter telling you to start sending your payment to so and so because your loan has been sold.

Most of the time if you are making your payment to Chase, Wells Fargo, Bank of America, Fifth Third etc. They are just servicing your loan. They sold it to Fannie or Freddie 30 days after you closed.

Unless the servicer also owns the loan if they take the house back due to non payment they have to assign it over to the entity that holds the note. They don’t get to keep it.

Whether the banks are servicing for Fannie or Freddie is irrelevant. The banks are farming out the lesser loans to other (lesser?) crooked servicers who are defrauding and cheating the home owners. They are all making money doing it or they wouldn't be doing it.

State Attorney General offices often win big settlements against them but the crooked servicers seem able to absorb the loss, change their name and start over.

Again (and again and again) the State Attorney General Offices now have huge departments to keep up with all the crime going on. Check with your own State Attorney General's office and wonder "Gosh, why do they have this huge department to prosecute crooked Mortgage Servicers?"

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.