Does it matter if your mortgage is sold?

If you get a notice that your mortgage has sold, don't worry. Selling your mortgage allows your lender to “receive a cash payment up front instead of waiting for you to make payments,” Whitman says. If the lender sells your mortgage loan to a new owner, the new owner must, by law, notify you of that fact. This notice is different from the notice your mortgage servicer must send you if management rights are transferred.

On the one hand, selling their loan liquidates their debt and allows them to grant more new loans. Alternatively, they may choose to sell their loan to raise funds; selling their loan guarantees immediate cash, while their investment in their loan can take 15 to 30 years to recover. If your mortgage loan has been sold, you will receive proof from both your old and new lenders. Your new lender will send you a notification of the transfer of ownership of the loan within 15 days of the effective date of the transfer.

This notice will include personal information such as your name, address, and contact information. You must also include the date of the transfer, as well as whether the transfer of ownership is correctly recorded in public records. Be sure to check all the documents you receive. Roger has personally granted more than 2,500 residential loans and, according to the nation's top lender, United Wholesale Mortgage, is among the 1% of the top lending agencies in NH.

This notice will include the name of the company that now owns your mortgage loan, their address, and their phone number. The first thing to do when you learn that your mortgage has sold is to contact your mortgage brokerage agency. To find out who your servicer is, check your monthly mortgage statement or payment slip book. What matters is how the sale of your loan will affect you, as well as your relationship with your agent (if you have one).

If you sell your mortgage debt and receive a notice of transfer of ownership, this doesn't necessarily mean that the mortgage management rights have also been sold or that you are hiring a new servicer. First, let's define the terms lender, owner and servicer as they relate to the mortgage business. The idea of selling your mortgage may be surprising, but it's quite common and is likely to happen many times over the loan's terms, whether it's 10, 15, or 30 years. This is true even if your lender also acts as your servicing entity; you may choose to sell the mortgage and keep the right to pay it.

Among other things, it amended the Truth in Lending Act to require borrowers to receive notice when their primary home mortgage debt is sold, transferred, or ceded to a new creditor. Businesses may choose to sell management rights because maintaining mortgage services can be costly and time consuming. Sometimes they have to give up existing loans, such as mortgages, in order to have enough cash to lend to other customers. While all of this activity usually happens behind the scenes, from time to time you'll receive a notification that your mortgage has been sold to another lender.

Even if your loan servicer has its own mortgage rates, having a new servicer doesn't change what you've borrowed, the interest rate you've accepted, or the amount of your monthly payment.

Rosanne Pacana
Rosanne Pacana

Disclaimer: The information provided on this website is for general informational purposes only and does not constitute financial, investment, or legal advice. Please consult with a qualified professional for personalized advice. We do not endorse or guarantee the products, services, or information provided by third-party links or advertisements on this website."