Do Mortgage Transfers Put Borrowers At Risk?

Apr 28, 2020

Aerial view of island forming question mark.

Director of Events

The mortgage servicing industry has been on pins and needles during the duration of the COVID-19 pandemic. Recently, they received some relief from the FHFA, but the overwhelming number of borrowers who applied for forbearance, or that were unable to pay their mortgage is continuing to increase. A recent report from Bloomberg Law revealed that the volume of mortgage transfers could pose risks to borrowers.

In his report, Evan Weinberger revealed that issues transferring loan files are elevated in times like this for distressed servicers. He cited Ditech Financial Inc.'s halt on "proposed sale of servicing assets" last August, after homeowners said their files contained a large number of errors. He added that this becomes even worse when a large number of loans are being modified, to help provide relief in the form of forbearance for a borrower.

"A traditional loan modification that alters the terms or principal due on a mortgage requires a great deal of paperwork, with copies given to the borrower. A forbearance is often a verbal or otherwise informal agreement that might be hard to prove if loan files have errors or are misplaced in a servicing transfer," said Jason Bushby, a partner Bradley Arant Boult Cummings LLP, according to the report.

Click here to read more about why mortgage transfers could put mortgage borrowers at risk.

About the author

Navi Persaud

Director of Events

Navi Persaud is Director of Events at NMP.

Link copied

Published

Apr 28, 2020

Industry News

Newfi And Addy AI Announce Partnership

Newfi and Addy AI today announced a collaboration focused on the continued evolution of artificial intelligence in mortgage lending

Newfi and Addy AI today announced a collaboration focused on the continued evolution of artificial intelligence in mortgage lending.Newfi has built innovative lending products and a modern approach to the mortgage market. As the industry evolves, the company continues to exp...

Analysis and Data

Smaller Down Payments Give Buyers More Room, But Rates Limit The Savings

The typical down payment fell 9% from a year ago, while shifting market conditions are giving originators different affordability conversations across the country

Homebuyers are putting less money down than they were a year ago, another sign that increased inventory and greater negotiating room are changing the purchase market.The typical down payment fell to $27,100 in the second quarter of 2026, the lowest second-quarter dollar amou...

Nov

Houston, TX

More from

Industry News

CHLA: More Freddie Mac MBS Buying Could Narrow Mortgage Spreads

Trade group estimates greater Freddie participation could compress spreads another 10 to 12 basis points as Fannie has taken the lead in GSE mortgage-bond buying

Industry News

Sep 23, 2026

Early Loan-Limit Race Splits Into Three Tiers

Lenders are now offering $845,000, $847,440, or $850,000 before FHFA sets the official 2027 limits

Industry News

Sep 23, 2026

Better, Garg Clash Over Claimed 46% Shareholder Support

Better disputes its former CEO’s preliminary consent count as the two sides trade accusations and an Oct. 2 target date approaches

C-Suite Strategies

Sep 23, 2026

Fannie Changes How Rent From A Former Home Counts

Fannie now prohibits leases for departing residences and permits market-analysis tools instead of Form 1007, creating a key documentation difference from Freddie Mac

Regulation and Compliance

Sep 22, 2026

MPF Expands Eligibility For Manufactured And Renovation Loans

The Mortgage Partnership Finance Program has expanded MPF Traditional eligibility for affordable loans, manufactured homes, renovations, and lender-funded assistance

Industry News

Sep 22, 2026