Glossary of loan modification terms

bank

“Bank” is a generic term for a mortgage lender, investor, trustee of a trust (when loans are securitized) or a loan servicer. The bank name on your statements or bills is probably the name of your loan servicer.

borrower assistance form

This is one of the most common names used for a loan modification application. Other banks may call the application a “request for mortgage assistance” or a similar name.

investor

Chances are, the bank you got your mortgage from no longer owns that mortgage or even communicates with you about it. Most owners of mortgage loans use companies called loan servicers to communicate with borrowers and collect mortgage payments on behalf of the loan’s owner, sometimes referred to as the investor.

loan modification

A loan modification, in technical terms, modifies the note and mortgage that relate to your mortgage loan. Banks use modifications to create a new, affordable monthly payment for borrowers who are behind on payments. Banks will commonly offer a trial modification, which requires a borrower to make three monthly consecutive payments, before offering a final or permanent modification.

loss mitigation

Loss mitigation is an umbrella term that banks use to describe programs or arrangements that are offered when a borrower falls behind on payments. Home retention loss mitigation options are those that let you keep your house, such as a forbearance, repayment plan, or loan modification.

servicer

Mortgage loan servicers, such as PHH, NewRez, Mr. Cooper, Cenlar, Rushmore, SPS, SLS, Wells Fargo, Chase, LoanCare, and Seterus handle the day-to-day business of mortgage loans, such as sending out statements, escrow disclosures, notices of default, and other correspondence. Servicers also collect payments from borrowers on behalf of the loan’s owner or investor.

third party authorization form

Banks and servicers aren’t allowed to give out information about your account to anyone unless you have authorized the bank to do so. The third party authorization form is how you tell your bank or servicer that it’s okay for our company or employees to send documents to the bank on your behalf, such as your loan modification application. The third party authorization form also authorizes them to talk to us if we call them to check on the status of an application.