Sometimes it gets confusing figuring out who’s who in real estate transactions. So in today’s post, we thought we would give you a brief lineup of the players involved in most home loan or foreclosure situations.
Parties in a Home Loan Transaction
Buying a home is a major investment for most people. For most people, it requires a lot more cash than they have. So most buyers borrow the money they need to purchase their home from a bank or other lender. In other words, they take out a home loan.
There are 2 main documents that make up a home loan. They are the promissory note and (in Georgia) a mortgage (or security deed). The promissory note is a written promise to pay back the money borrowed. The mortgage (in states that do not use mortgages, this would be a deed of trust) gives the lender a security interest to the property to secure the promise to pay.
Who is Involved in a Home Loan?
The parties involved in a home loan transaction include:
The Borrower — also known as the “mortgagor,” is the person borrowing the money to buy the house;
The Lender — also known as the “mortgagee,” is the entity or person (oftentimes a bank or lending institution, but this can be private lender as well) who is loaning the borrower the money;
The loan servicer — the person or entity responsible for collecting the monthly mortgage payments from the borrower and crediting the account with all payments. The loan servicer is usually a third party that manages the account on behalf of the lender or an investor for a fee. A loan servicer’s duties include collecting and processing all loan payments, as well as initiating and monitoring a foreclosure when a borrower fails to make all monthly payments.
The investors — An investor is a person or entity who invests in home loans or buys loans from lenders. (Fannie Mae and Freddie Mac are considered investors.)
If the property goes to foreclosure, some of the parties may change. It is the “holder of the mortgage” (who may or may not be the original lender) who is responsible for publishing the required foreclosure notices. Because home loans are often sold (i.e., “assigned”) the “holder of the mortgage” may not be the original lender.
Foreclosures can be complicated and difficult to navigate, which is why you should always consult with experienced real estate counsel if you are facing foreclosure or have questions about your home loan transaction.
We Fight to Protect Your Property
If you are facing foreclosure or have any other real estate matter, call us. We are experienced real estate attorneys with offices in Cumming, Georgia. We have helped others and we can help you, too. We serve clients in Atlanta, and in a number of counties throughout Georgia, including: Clayton County, Cobb County, Dekalb County, Douglas County, Fulton County, and Paulding County, among others. To schedule your free phone consultation, call us at: 770-888-7707. Or you can contact us here.