If you have a "mortgage company" they more than likely don't actually "own" your mortgage loan, they likely "service" it for the true owner. Gone are the days when you would go down to your corner Savings and Loan, and discuss your mortgage with your friendly banker, and iron out any problems.
Mortgage servicing is the collection of your mortgage payments, and all the other administrative tasks that go along with managing your mortgage.
Now if you have an issue with your mortgage, you are just as likely to find yourself speaking with a call center in Mumbai, India. Dealing with problems with your mortgage can be truly daunting.
Well, the Consumer Financial Protection Bureau (CFPB) is a new federal agency set up to help consumers. One of the things that they are doing is making more rules concerning mortgage servicing to protect consumers. And this is causing some of the mortgage servicers to get out of the business.
According to an article written by Richard Isacoff in American Banker, U.S. banks are expected to sell as much as $2 trillion in mortgage servicing rights or MSR's. According to Mr. Isacoff, the causes for this sell-off are tough new capital requirements and the past failures in servicing troubled loans that has brought unwanted scrutiny from regulators.
He says other companies will pick up the slack in the industry, including nonbanks like Nationstar (NSM), Ocwen Financial (OCN) and Walter Investment (WAC), all of which have been buying up banks' servicing portfolios.
So you better get Mumbai on speed dial, if you have trouble with your mortgage, you may be calling them quite a bit.