Financing in 11757>Question Details

Karen, Home Buyer in Lindenhurst, NY

If my morgage company sells my loan...how will that affect me? I am told that it just transfers over. Sounds

Asked by Karen, Lindenhurst, NY Thu Jun 5, 2008

sketchy to me...Is this a noraml process for morgage companies?

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It's very normal and happens more in the beginning of your loan term. One thing to be very careful of though.. When loan are sold between lenders, that is the greatest time for human error. You should get a notice advising you that your loan has been purchased by the new loan company. It will also tell you when to make your payment to them. Before you send out that first check, call them. Be sure you are in their system and have them give you your new loan number.Put that number on your check. A few days after making your payment,call them back and be sure it got credited properly. It may be a bit of a hassle, but it's a lot easier than them mis-applying a payment, showing you late,and then you correcting their mistake.
Web Reference: http://www.ffhomes.net
1 vote Thank Flag Link Thu Jun 5, 2008
As everyone stated before... it pretty much does not affect you... just make sure you understand who owns and services your mortgage... and to whom to send your monthly payment to... you do not want to miss a payment by accident...

Phyllis Lerner
Associate Broker
Legends Realty Group
914-438-7556
0 votes Thank Flag Link Sat Jun 21, 2008
Karen,

I agree with most people here it will not affect the terms or conditions of your loan, only the servicer. This is quite frequent throughout the industly so banks and mortgage brokers are able to offer products that are out of their portfolio and conventional guidelines. You should be fine.

However, I would urge you to make sure you read all of the literature clearly and know for a fact who you are supposed to make you next payment to. I have heard, insome cases where the consumer will get confused and send the payment to the old bank causing them to miss a payment. So I would definately urge you to stay in contact with both banks to be confident when the transfer will occur. Good Luck

Brent Bester
Mortgage Professional
614-622-8916
0 votes Thank Flag Link Thu Jun 5, 2008
It will not affect you at all. In fact, even the address to which you send your payment may very well stay the same.
Web Reference: http://GailGladstone.com
0 votes Thank Flag Link Thu Jun 5, 2008
It is common practice for the originating bank to sell off the loan to a servicing company and will not in any way change the terms of your mortgage note.
0 votes Thank Flag Link Thu Jun 5, 2008
Karen,

In addition to the points raised in the earlier answers, while your terms cannot change, the new "servicing company", the one that gets your loan, has their own way of managing the unexpected. That is, they may be more or less lenient with late payments, or with reporting you if you are late to the credit reporting agencies. They may also be more aggressive (sometimes much more) at now marketing to you the other "services" they offer, like mortgage life insurance (they pay off your mortgage if you die), or accelerated payoff schemes (where they will actually charge you the benefit of paying off your loan early). They could also have a very different time table for managing foreclosures, and their negotiating techniques during foreclosure could be more aggressive.

This is not to scare you, just to prepare you that when a loan is sold, while things may never change with respect to your terms and conditions, the new company is just that, a new entity with its own way of doing business. If you make your payments on time, then the most likely change you might ever see is just more junk mail.

Good luck,

Jeffrey
0 votes Thank Flag Link Thu Jun 5, 2008
No effect at all! Depending on the type of mortgage the loan is either held or sold, but the terms for you as a customer will never change.
0 votes Thank Flag Link Thu Jun 5, 2008
Some companies sell 100% of thier loans, so it is a very common practice. I wouldn't worry about it but using Pat's advice probably isn't a bad idea
0 votes Thank Flag Link Thu Jun 5, 2008
Hello!

Mortgage companies usually sell their loans after they fund it, some may decide to keep them. Your loan terms should NOT change with the transfer. The new mortgage holder will buy your loan with original terms.
0 votes Thank Flag Link Thu Jun 5, 2008
Yes it is normal for mortgage companies to do that, They buy and sell loans all the time. Your loan should not change, what ever you agreed to inthe original contract should stand. For an exanple if you have a 30yr Fixed at 6% it would stay the same for the life if the loan.
0 votes Thank Flag Link Thu Jun 5, 2008
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