If you thought keeping on top of your mortgage was difficult enough already, just wait until it is sold and a new company is demanding loan payments from you ...
Is it Normal for My Mortgage Loan to be Sold?
You were careful and even meticulous about shopping for a home loan - and screening mortgage brokers - to make sure that you got a good deal and that you were getting a loan from a reputable company. So after all that, could they just turn around and sell your mortgage loan to someone you have never heard of?
Absolutely, and it happens every day. In fact, most home loans are sold. A mortgage company, even your local bank, makes the bulk of its money by originating loans, not keeping them. Only a select few of the safest and most attractive loans are normally held by those who make them. The rest are sold on and turned into mortgage backed securities (MBS) or at a minimum have the day-to-day servicing passed on to a third party. It may be confusing, but suffice to say it is what fuels lending, the housing market and the U.S. economy. Well, at least until it all falls apart and comes crumbling down.
So yes, expect your home loan to be sold or at least to have a servicing company contact you for payment collection.
Can My New Mortgage Lender Change My Payments?
Even though it is normal for home loans to be sold, it can be scary. How do you know if you are paying the right person? Can you lose money if you make your payment to the wrong mortgage company? Will a new lender mean higher payments, higher interest rates or a different payment date?
Thankfully, no matter how many times your mortgage loan is sold or who ends up servicing your loan, none of the terms of your loan can be changed. You will normally receive plenty of warning when your mortgage is sold - assuming, of course, you aren’t allowing your mail to pile up because you are afraid of receiving more late notices.
How Can I Avoid Becoming a Scam Victim?
Don’t panic if you receive a notice from a new company requesting a mortgage payment from you. However, you should also be careful not to become a victim. Your mortgage is public record and anyone with Internet access can find out many of the details about your home loan. In 2009 the Obama administration passed the Helping Families Save Their Homes Act, which included a provision requiring lenders to provide homeowners with 30 days notice of a transfer in servicing. Still, if you are concerned, it is always smart to contact your old or current lender to make sure that this is a legitimate transfer.
What if I Need a Loan Modification?
If you need to contact your lender to apply for a loan modification or arrange for a short sale, and you aren’t sure exactly who owns your loan, you aren’t alone. Millions of American homeowners are in the same boat. If you find yourself in this situation, start with calling the phone number on your mortgage statement to inquire about who is responsible or authorized to negotiate a short sale or loan modification. Can’t find your statement beneath all of the other bills? Check out the government’s Making Home Affordable website for links to Fannie Mae and Freddie Mac to see if they own your loan and if you can qualify for one of the current programs on offer. If you still aren’t having any luck, then an attorney or Hope Now counselor can assist you with tracking down the note holder and servicer managing your home loan.