If this happens, it means that your mortgage has been sold to another financial institution, and now you will be sending your monthly mortgage payments to a new company. Many times when this happens you may not even notice a difference and the change can seamless. However, there are situations where the homeowner will have problems with the switch and face inconveniences. Either way, it is important that homeowners understand what their rights are when this happens.
In today's real estate world, it is a very good possibility that your mortgage will be sold to a new lender. It is common place nowadays that home loans are bought and sold on the free market like stocks and bonds.
Homeowners should receive a notice from your current mortgage company as to the situation. Federal mandates require both the seller and the buyer of your paper to notify you of the pending sale and the closed sale.
Your current lender must notify you, in writing, at least fifteen days before your next payment is due. The lender is also required to give you complete contact information – company name, physical address, phone number and account manager of the new servicer.
The servicer buying your loan is required to provide this information to you as well. They are required to provide a direct link to a person you can speak to – not just an automated system.
This protects you from mortgage scams directing you to send payments to an unknown entity via P.O. Box or wire and gives you the right to ask questions about the status of your loan and receive prompt answers. In addition, you are protected from any delinquency status for 60 days during the transition.
If you are behind in payments, your loan will likely stay put, as most servicers aren’t interested in purchasing problem loans. If you have an application in for loan modification, your loan will probably not be sold as well. However, if it is sold after you have started the loan modification process, be prepared to provide additional paperwork or even start over with the new lender.
The Mortgage Bankers Association of America (MBAA) has a great consumer site – The Home Loan Learning Center. You can also contact them for more information via phone at (202) 557-2700.
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