[quote=UCGal][quote=SD Realtor]Lets try to make sure we have the basic understanding of servicing the loan verses owning it okay?

Most loans are OWNED by investors. Most entities such as banks service them. Yes some banks do own portfolios as well. However understanding the basics is a good start. So to imply the big banks are holding bank cazillions of homes is an incorrect statement.[/quote]

Semi-Hijack:

We know that there are large numbers of homes in some stage of delinquency. Many have received NODs but not NOTs. From what people have posted here – there are apparently folks who have not even received NOD, despite failure to pay the mortgage.

We know that a large number of loans are owned by Fannie and Freddie. I read that this makes up 60% of mortgages. That leaves 40% – of which many are bundled into MBSs… So investors own shares of a tranche of mortgages.

Who decides when a delinquent property goes to trustee sale? It is likely to be the servicers, not the investors. Heck, the investors are so far removed from the individual mortgages, how would they even know? They only know if their MBS bond is performing or not.

Or am I just confused about this? Maybe the investors really do have knowlege and are in the loop of deciding when to foreclose vs when to let the mortgagee stay rent free.[/quote]

The servicers make the decision, yes.
Also, the servicers advance payments to investors and collect those advanced payments and late/misc fees when the property sells.

Dave says the servicers are understaffed, incapable of closing any faster and suffering losses along the way. Some other people say that is not the case.