It seemed like the ink was barely dry on your closing papers when you received notice that your mortgage had been sold to another company. While startling, it won’t change the terms of your loan. Here’s what you need to know.
Why do mortgage companies sell mortgages? Mortgage companies lend money to thousands of borrowers. Over time, a company might decide to return to a stronger cash position, so it will sell off some of the mortgage contracts to other companies. When it does, it acquires more cash to continue lending. Companies also make a commission for selling the mortgage.
How does it affect the terms of my mortgage? The short answer is: It doesn’t. Your mortgage is a contract and all that changes is the company that owns it. The terms, for you, do not change. Your interest rate, the length, nothing changes.
But I didn’t authorize the sale of my mortgage. If you read the lengthy terms of your mortgage contract, you’ll find a clause that authorizes the mortgage company to sell your contract to another lender or servicer.
What are my rights? When your lender sells your mortgage, it must give you notice no less than 15 days from the transfer, and the new company also must notify you during that time. The new company must give you its name, the date of the transfer, address, telephone number, customer service information and whether the transfer is recorded publicly.
What should I do? When you get your first mortgage statement from the new company, go over it carefully. Make sure your personal information is correct and that the numbers for your mortgage payment, loan amount and escrow are accurate. Go to the company website to setup your account so that you can monitor your payments and escrow. Also be sure to update your homeowners insurance policy with the new company information when a sale occurs.
What if I have problems and can’t get them resolved through customer service? The Consumer Financial Protection Bureau is your advocate. Get help at www.consumerfinance.gov.