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Consider A Loan Servicing Agent
To Collect
Your Monthly Payments
Loan servicing includes collecting payments from borrowers,
disbursing payments to lenders or note holders, mailing appropriate
notices, monitoring the status of senior liens and encumbrances,
maintaining adequate insurance coverage, and coordinating
foreclosure proceedings if necessary.
In the case of individual trust deeds, private lenders and note
holders decide whether to handle the loan servicing themselves or to
authorize a servicing agent by written agreement.
Many mortgage brokers will request delivery of the original
promissory note and deed of trust to the servicing agent to be held on behalf of the lenders or note holders during the term
of the servicing agreement. In some cases, the mortgage loan broker may be the
servicing agent.
Benefits of a Trust Deed Loan Servicing
Agreement
A loan servicing agreement provides a great value to investors because it allows a
servicing officer to collect on a trust deed and a note on their behalf.
Not only is this an effective means of collecting on a trust deed and note,
but it brings more peace of mind to the investor when there is an expert third party involved.
When an investor
makes the decision to involve a well established,
reputable third party, the investor has no direct involvement in enforcement of
the agreement. The borrower benefits because she simply has to send a single
payment to the servicing firm instead of multiple payees.
A loan servicing agreement is beneficial because it:
- Relieves investor from responsibility for monthly billing and
maintenance to get regular payments
- Eliminates the need for the investor to directly enforce loan
agreement terms
- Leverages the experience of loan servicing officers to resolve
customer service issues for
borrowers
Understanding the Loan Servicing Process
Depending on the agreement, basic responsibilities and duties fulfilled by the loan servicing officer might include:
- Bills the borrower, collects monthly payment, deposits funds
received into investor's escrow account
- Issues the appropriate checks to the investor
- Mails monthly statements and an interest earned check to the
investor
- Maintains the payments records and issues 1099 form for tax
purposes
- Makes all telephone and written communication to borrowers and
investors
- Starts foreclosure in the event of a default by borrower
- Schedules in-house legal counsel available to assist investor during
foreclosure process
Call 1-213-437-6379 toll free now for more information
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