When Your Mortgage is Sold: What to know. What to do. Roger Odoardi The secondary mortgage market has a lot of moving parts. Lenders are constantly selling loans to other lenders, jockeying for position and profit in the mortgage market place. All of this movement can, however, create a bit of confusion at times—especially if you’re a recent homebuyer who worked with a mortgage broker to secure you mortgage loan through one of these busy lenders. While all of this activity tends to happen behind the scenes, every once in a while you’ll get a notification that your mortgage has been sold to another lender. Don’t panic. This is incredibly common. A simple call or email to your mortgage broker to check in is all it takes. Here’s how it all works: Your mortgage broker is still your mortgage broker Remember, your broker doesn’t own your loan, the lender does. Your broker is simply your guide through the mortgage application and approval process, the person or persons who help you lock in the best interest rate for your loan. So even despite your mortgage being sold to a new lender, your mortgage broker is still able to assist you with refinancing efforts, any new mortgage needs, as well as answer any questions about the loan in question. Why your mortgage has been sold To you, your mortgage is personal. It represents the path you took to afford the house you’re living in. To a lender, your mortgage loan is a commodity, a product in which the rights to service are bought and sold. The reasons your lender may sell the service rights to your loan to another lender vary, but are most often related to the need to free up capital, cash in on a commission, or ditch existing debt. The reasons, however, don’t matter. What matters is how the sale of your loan will impact you, as well as your relationship with your broker (if you have one). What happens when your mortgage is sold If your mortgage loan has been sold you will receive proof from both your old and new lender. Your new lender will send you a loan ownership transfer notice within 15 days of the effective date of transfer. This notice will include personal information such as your name, address and contact information. It should also include the date of transfer, as well as whether the transfer of ownership is recorded properly in public records. Make sure to fact check all of the documents you receive. Next, you’ll likely receive a mortgage statement from the lender who purchased your loan. Make sure you read it carefully to ensure all the information included is accurate. That’s pretty much it. Nothing is really going to change The idea of your mortgage being sold may come as a surprise, but it’s fairly common and will likely happen many times over the courses of your loan terms—whether it is 10, 15 or 30-years. The good news is that the sale of your loan won’t affect the terms of your mortgage, so your payments won’t go up. You may need to fill out a little paperwork, but that’s really more of a formality. The only thing that will change is the way you pay your mortgage and who you speak with if you end up having questions. Make sure you send your next mortgage payment to the correct address. If you accidentally send the payment to your old lender, don’t fret. You’re protected under the Real Estate Settlement and Procedures Act (RESPA), which gives you a 60-day grace period during which your new lender cannot penalize you or apply a late fee to your account. What to do after your mortgage is sold The first thing to do upon learning that your mortgage has been sold is to touch base with your mortgage broker company. They will be a good guide in explaining the process. Then you should get to know your new servicer. You can check out their website and can call the customer service number to ensure everything is in good working order. Be sure to inspect all of the documents that are sent to you, and store them in a safe place. It’s also a good idea to set up automatic payments with your lender, that way when the loan is sold again it’s faster to reset automatic payments with your new lender. At Blue Water Mortgage, our trusted team of mortgage experts are master communicators—ensuring all customers are aware of changes in their mortgage terms at all times. Contact us today if you have questions about your mortgage that was recently sold to a new lender. Roger Odoardi Roger is an owner and licensed Loan Officer at Blue Water Mortgage. He graduated from the University of New Hampshire’s Whittemore School of Business and has been a leader in the mortgage industry for over 20 years. Roger has personally originated over 2500 residential loans and is considered to be in the top 1% of NH Loan Officers by leading national lender United Wholesale Mortgage.
