If you have a mortgage, chances are that your lender sold your loan and that you’re now paying a different company who bills and collects your monthly mortgage payments.  This is a sign that your mortgage was “securitized.”  Investment banks and other financial companies used “securitization” to pool thousands of mortgages together.  The monthly payments received on these loan pools is supposed to be held in trusts.  The trusts are supposed to dole out this money to big investors like pension funds, foreign countries, and other banks who bought “mortgage-backed securities” from the trusts.

You may already know if your mortgage was securitized.

If your mortgage was “securitized,” there is a good chance your monthly payments are going to a mortgage “servicer” that doesn’t have any legal right to collect your monthly payments.  That’s because most securitization trusts never received the mortgages they were supposed to hold as collateral.  As a result, the mortgage servicing companies hired by these trusts may have no legal right to demand and collect payments, declare defaults, initiate and consummate foreclosures, or even report borrowers’ payment status to consumer credit reporting agencies.  

If you or someone you know has a securitized mortgage, your servicer may lack authority to collect mortgage payments.  If so, you may be entitled to court relief protecting you against having to make unauthorized payments, compensation for payments wrongfully collected, or other relief.  To discuss your legal options, contact the mortgage securitization lawyers at Arias, Ozzello & Gignac today for a free consultation.