Sale of Home Loan Is Cause for Worry

Under the headline “Don’t Worry About Lender Selling Loan” (“Your Mortgage” by Jack Guttentag, Oct. 10), the opinion is given, “I don’t think you should be disturbed about it.”

In contrast, “Real Estate Q&A;” contains a letter from a homeowner whose loan had been sold four times in six years only to land in the hands of a scam artist who repeatedly and incorrectly claimed late payments.

A homeowner may have taken out a loan with a given lender because it was knowledgeable and available. But once the servicing is sold, you’ll never again deal with the responsive people you originally chose to do business with.

Do you think the late-payment scam would occur had the homeowner still been able to do business with the same people who originated the loan? Or walk into a local office and demand that the problem be cleared up?

Yes, homeowners should be concerned with lenders selling loans. For example, if any of the legalese on the standard contract were clarified for the benefit of the homeowner, the loan couldn’t be sold.

Based on experience, the loan might not be sold to a competent servicer, so you may start getting notices that insurance has not been paid from the escrow account set up for that purpose. You must endure endless trials to get through on an 800 number to loan service agents and their clueless supervisors who only repeat scripts.

When you receive final insurance cancellation notice, pay the insurance company and deduct it from the next payment, you get threatening letters from the servicer and unannounced notifications to credit companies. This engenders yet more trials in getting through on the ever-busy 800 number.

When you formally inquire who the owner of the loan is, so that you can notify the lender of the default in the servicer’s duty, the servicer won’t tell you.

When you ask to dispense with the escrow account and pay taxes and insurance yourself, the servicer merely repeats the statement in the loan document that there must be an escrow account. The owner of the loan is thus completely insulated from finding out that the servicer is incompetent.

In an ideal loan service world populated by efficient and professional people, there’s little to worry about when a loan is sold. But in reality, there is no upside for the homeowner.

LEWIS H. COHEN

Riverside