September 9, 2017

Why is it important to know who the investor is on your loan? Contrary to popular belief, the bank you send your payment to rarely actually owns your loan. Loans are actually owned by investors, and only serviced by who you send your payment to.

Whether you send your payment to Bank of America, Wells Fargo or GMAC, they do not actually make decisions about your loan or your short sale – they only service your loan according to the investor’s guidelines. The most common investors/entities to own your loan are Fannie Mae, Freddie Mac, FHA, VA or private label investors (usually smaller financial entities).

Once in a while your servicer may actually also be the investor on the loan (ie Chase servicing a Chase-owned loan: a portfolio loan), but this is not usually the case. The entity that will decide how your short sale is handled is actually the investor that owns your loan, never the servicer that you send your payment to.

So when I am asked a question like “Will Wells Fargo forgive my debt completely”, the answer is that Wells Fargo (as the servicer) does not have the power to make that decision – only the investor does, and the real question is “Will Fannie Mae/Freddie Mac/FHA/VA…forgive my debt?”

Knowing who the investor is on your loan is the single most important piece of information about your loan that will ultimately determine how your short sale will go. I don’t expect the average consumer to know this information, and so it is my very first question as soon as I am able to talk to my seller’s lender. I do expect a real estate agent working a short sale to also have this information. I get a lot of calls from other realtors with questions about their short sales, and I am always shocked when the agent does not know who the investor is. It’s the absolute most important information to know in a short sale!

How can you even attempt to work a short sale without knowing who the investor is? With that being said, if you are a home-seller considering a short sale and your agent doesn’t ask about the investor on the loan or know the value of that information, you are dealing with an inexperienced short sale realtor and signing up with this person will likely not get your short sale accomplished ! Run the other way and get yourself a new agent!

Is a short sale right for you?

Last Updated on September 14, 2017 by Minna Reid

Fannie Mae, FHA, Freddie Mac

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About the author

Minna Reid

Minna Reid is The Broker - Owner of Reid Real Estate Group. Reid Real Estate Group is a full-service Connecticut residential real estate brokerage, specializing in helping homeowners with legal and financial challenges including short sales, probate sales and tax lien complications.

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If you have a tricky home sale situation, I could not recommend Minna highly enough. And she was right: she said everything would be OK, and it was.
  
 
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  I inherited my father's head and was completely in over my head. Minna was amazing in getting things straightened out with the mortgage company (which had been giving me issues for years) and was so responsive to my emails. I had a lot of questions, as this was my first time going through the selling process, and she was able to answer them all quickly. The selling process was so much easier than I expected it to be, thanks to Minna and her team!
  
 
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 2021-07-31
 
 
  My husband and I worked with Minna to sell my father-in laws house after my father-in law-died. 
Minna is highly knowledgeable in regards to selling estate properties. She took the time to explain the process to us and she was very responsive to our needs. Minna was also highly motived to assist us in selling the house quickly. We listened to Minna’s advice in regards to selling the house (during the bidding process) and the house sold for well over what we expected. 
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 2021-04-29
 
 
  Minna has been a fantastic partner in selling our home. She was patient with us in explaining the differences between a short sale and conventional sale and helped us think through the pros and cons of each. During the process of the sale she was strategic and got us the best price for our sale. The process was painless and quick and every step of the way she managed each and every detail flawlessly.
  
 
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 2021-02-23
 
 
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 2020-12-10
 
 
  Minna was the best thing that happened to us in a very long time. We’ve been planning on moving from on house and on with our lives and the house was simply an anchor. We’ve had two liens on the house that would take a long time to cure and we were forced to sell the house to settle with the bank. I’ve looked around for someone who specializes in short sales, not just an agent that did 2-3. The process took a while, but Minna was super persistent, and her strategic approach was close to none. We have lost two buyers, got a push backs from the back and lean holders and she was able to stay on top of it and at the same time, she kept us afloat emotionally. Because of her, we were able to leave CT and move to FL where we are currently waiting for our new place. Warm thank you to Minna and her team for doing what they do best. Marcin with family.
  
 
        Sarah Woodbury 
 2020-09-13
 
 
  I reached out to Minna when we were first considering a short sale. I didn’t know much about the process or how it worked so naturally I had a ton of questions. She answered all of my questions as well as explained the process in detail so I would know exactly what to expect. Several months later, we kicked off the sale. I had heard so many horror stories about what can go wrong in a short sale so I was very uneasy. With Minna’s expertise the process was so much smoother than I could have ever anticipated! It was just over three months from the time we listed to closing (which is fast for a short sale)!  Minna’s responsiveness and dedication along the way was a huge asset!! It’s because of her that our family is able to put the past behind us and move on to bigger and better things! I highly recommend her!

Who really owns your loan and why it matters in your short sale

Minna Reid

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