Missouri Attorney General Chris Koster :: Mortgage Foreclosure:: Important Definitions Page 1 of 1

Important Definitions
Browse the terms used by banks in dealing with residential mortgage loans can be confusing and complex. Here are some basic definitions of some of these terms:

z Allonge — A separate document used to demonstrate transfer of ownership of promissory notes, usually by endorsement. In Missouri, the allonge is
supposed to be affixed to the promissory note. Generally, an allonge is only supposed to be used if there is no longer room on the promissory note for
additional signatures.
z Arrears — The amount claimed to be past due on a mortgage loan.
z Deed of Trust — The most common type of mortgage loan in Missouri. This document is frequently referred to as the mortgage and represents the collateral,
or lien, against your home. This is a complicated and important document that determines how an entity may lawfully foreclose on a home.
z Escrow — A separate account for payment of taxes, usually included in your monthly mortgage payment.
z Fees — Fees may be charged to borrowers for being late in payment or for other items related to foreclosure such as determining the current value of a
home. Excessive or improper fees may not, however, be lawfully charged to homeowners. There have been many instances where inappropriate fees have
been charged to borrowers in foreclosure, or on the verge of foreclosure.
z Holder — The entity entitled to receive payments under a promissory note.
z Payment History — Mortgage servicers keep records of how payments have been applied to mortgage loans. This record is called a payment history. This
document can be complex and confusing. Most homeowners will need an experienced lawyer to interpret the charges and payment applications.
z Promissory Note — This is the document that contains a description of the amount borrowed by a homeowner and the terms under which the borrower has
agreed to pay back a lender. The Deed of Trust “secures” the promissory note, meaning that if a homeowner fails to pay according to the terms of the
promissory note, the note owner may foreclose.
z Servicer — This is the company that sends your mortgage bills and collects payments, often a bank or financial institution.
z Suspense Account — Mortgage loan servicers maintain suspense accounts related to mortgage loans where payments that are not promptly applied to loan
principal, interest, or fees are kept. Suspense account information may show how fees have been charged to homeowners, among other important items.

http://ago.mo.gov/mortgage_foreclosure/important_definitions.htm 4/20/2011
Missouri Attorney General Chris Koster :: Mortgage Foreclosure FAQs Page 1 of 2

Frequently Asked Questions

Table of Contents

Q: How will I know if I am at risk for a foreclosure?

Q: Who owns my mortgage loan?
Q: Missouri law generally allows for nonjudicial foreclosure. What is a “nonjudicial foreclosure”?
Q: How do I demand information about my mortgage loan?
Q: Where can I get help?

How will I know if I am at risk for a foreclosure?

The first document generally sent to homeowners in Missouri is a “Notice of Default”. This document identifies the claimed default and contains a demand for full payment of
the entire balance of the mortgage loan. Frequently, the homeowner is given 30 days to pay the full loan amount or foreclosure proceedings will begin. If a homeowner has
concerns regarding whether a default on their mortgage loan has actually occurred or how much is actually due, it is important to demand the servicer's records regarding this
information as soon as possible. It is highly advisable to seek good legal counsel.

The second document is a “Notice of Sale”. This written notice must be sent to homeowners by certified or registered mail no less than 20 days prior to the foreclosure sale
date. The notice must identify the date, time, and location of the foreclosure sale. In addition, advertisement of the foreclosure sale must appear in a local newspaper
numerous times before the foreclosure sale date. Homeowners having trouble with their mortgage payment should pay attention to foreclosure listings in their local
newspapers to stay fully informed.

[ back to top ]

Who owns my mortgage loan?

In most instances, the party you dealt with in obtaining your mortgage loan is not the party that claims to now own your loan. This is because most mortgage loans are often
sold to other investors or government owned entities Fannie Mae and Freddie Mac. The company that sends out mortgage bills and collects payments is called a “servicer” and
is generally not the loan owner. Servicers are usually large banks such as Bank of America, Wells Fargo, Citibank, and JP Morgan Chase. Homeowners have the right to
obtain important information from servicers and loan owners that may indicate foreclosure attempts are wrongful. However, homeowners must act quickly to exercise their
rights to obtain this information.

[ back to top ]

Missouri law generally allows for nonjudicial foreclosure. What is a “nonjudicial foreclosure”?
State laws govern how foreclosures may proceed. Missouri law generally allows foreclosures to occur without a court case being filed by the party seeking to foreclose. This is
called a “nonjudicial foreclosure”. However, if adequate grounds are met, homeowners may file a court case to stop a wrongful foreclosure attempt. Seeking good legal advice
is critical in this regard.

[ back to top ]

How do I demand information about my mortgage loan?

It has become clear that, in many instances, accurate mortgage loan records have not been kept regarding important information such as loan ownership, payment history, and
fees charged to homeowners. These inaccuracies may cause wrongful foreclosure attempts. Homeowners should know who to contact and what to demand in order to call out
any errors by the servicer or loan owner.

http://ago.mo.gov/mortgage_foreclosure/FAQs.htm 4/20/2011
Missouri Attorney General Chris Koster :: Mortgage Foreclosure FAQs Page 2 of 2

As of May 20, 2009, federal law requires that a notice be automatically sent to homeowners when a change in ownership of their mortgage loan has occurred. This notice must
include the contact information of any party who has authority to act in regard to the mortgage, such as making loan modifications or correcting errors. Federal law also
requires loan servicers to respond to qualified written requests from homeowners and provide: contact information for the owner and master servicer of a mortgage loan; an
accurate statement of the full amount due under the loan terms; and a complete accounting of the loan history, including all fees or other charges imposed on the homeowner
and how payments have been applied. These requirements are stated in the federal Truth in Lending Act and Real Estate Settlement Procedures Act. Loan histories are
complicated documents that are difficult to understand and frequently contain errors that call into question whether a foreclosure is proper. It is very important that homeowners
obtain good legal advice in gathering and reviewing this information in order to correct any errors, stop wrongful foreclosure attempts, and/or engage in meaningful modification
negotiations.

[ back to top ]

Where can I get help?

Homeowners who are trying to stop foreclosure, remedy excessive fee charges, or modify their mortgage loan should immediately seek competent legal counsel and/or the
assistance of a certified housing counselor. There are many government certified housing counselors who are skilled in assisting homeowners facing foreclosure and provide
their services at no charge. A list of approved counselors in Missouri may be found at HUD. These counselors are not lawyers. Homeowners may also find referrals for a
competent foreclosure attorney from the National Association of Consumer Advocates or the Missouri Bar.

Homeowners who feel they have been subjected to fraudulent, unfair or deceptive actions by lenders, loan owners, or loan servicers should contact the Consumer Protection
Division of the Missouri Attorney General's Office or 1-800-392-8222.

[ back to top ]

http://ago.mo.gov/mortgage_foreclosure/FAQs.htm 4/20/2011
Missouri Attorney General Chris Koster :: Mortgage Foreclosure :: Important Documents Page 1 of 1

Seven Important Documents For Consumers

Missouri consumers have the right to obtain the following documents from loan servicers regarding consumer mortgage loans:

A copy of the original deed of trust with all assignments

A copy of the original promissory note with all endorsements and any allonge (an allonge is a separate document claiming to show ownership transfer; it is supposed to be attached to
the promissory note)
A complete payment history
Itemization of all fees and charges
Identification of all amounts claimed as past due (arrears)
Description of all escrow charges, surpluses, and/or deficiencies
Copies of all escrow statements

http://ago.mo.gov/mortgage_foreclosure/important_documents.htm 4/20/2011
Missouri Attorney General Chris Koster :: Mortgage Foreclosure :: How to Obtain Docu... Page 1 of 1

How to Obtain Documents from Your Loan Servicers

“Qualified Written Request”
If you have reason to believe your mortgage loan payments have not been properly applied and/or that improper or
excessive fees have been imposed on your loan account, the federal Real Estate Settlement and Procedures Act requires
that the servicer of your loan must respond to your written request for information concerning how your loan has been
serviced. This includes information such as providing a complete loan history; detailed escrow account information; a
description of how fees have been applied to your account; and the servicer's use of suspense accounts regarding your
loan. The written request is called a “Qualified Written Request” Please see the form contained on this page for guidance
on submitting a Qualified Written Request to your loan servicer.

“Loan Ownership Request”

Many borrowers have had difficulty gaining information concerning who owns their mortgage loan. Generally, the
servicer of your loan is not the party that actually owns your loan. Federal law requires servicers to identify the owner of
your mortgage loan. In 2009, the Truth in Lending Act was amended to require servicers to provide this information. In
2010, the Real Estate Settlement and Procedures Act was amended to require servicers to provide this information.
Please see the form contained on this page for guidance on submitting a request to your loan servicer to obtain
information concerning the ownership of your mortgage loan. Please see the form contained on this page for guidance on
submitting a request to your loan servicer to obtain information concerning the ownership of your mortgage loan.

Download the Download the Qualified

Written Request.

Download the Download the Loan Ownership

Request.

http://ago.mo.gov/mortgage_foreclosure/obtain_documents.htm 4/20/2011