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Borrowers must be notified in due time, by law
ARIZONA DAILY STAR
More than $1.5 billion worth of mortgages sitting on the books of First Magnus Financial Corp. will likely be finding new homes in the near future.
The Tucson-based mortgage lender made loans largely on credit. Now that the company has filed for Chapter 11 bankruptcy, the creditors want to take back the loans or get the proceeds from selling them to investors.
That may be leaving some borrowers wondering what might happen to their loans, and where they should be mailing their future monthly checks.
Luckily, there is a document — probably buried somewhere in borrowers' packets of closing materials — that addresses situations like this.
The document is usually called a "servicing disclosure statement," and it explains the notification requirements for companies that buy and sell loans, of the right to collect payment for them, under the federal Real Estate Settlement Procedures Act.