You just purchased your new home and a few months in, you receive a letter from your mortgage company or bank stating that your loan has been sold.  What does this mean and how will it affect you?

There are several reasons why your mortgage company would sell your loan to another.  Other than who you send your monthly payments to, nothing should change.

To Free Up Capital

One reason your mortgage company sold your mortgage loan to another is to free up capital to continue making investments and make loans to other borrowers.  This also helps them reduce their exposure to risk as they won’t have all of their eggs in one basket.

To Earn Money

Make money off of your loan?  It’s not as nefarious as it sounds, we promise!  Like all businesses, lenders need money to stay in business and be able to continue lending to homeowners like yourself.  They can generate cash by selling your loan to another bank while retaining the right to continue servicing your loan.

Your Loan Terms Will Not Change

When your mortgage loan changes hands, your terms should not change and you should be notified immediately of the change.  The Real Estate Settlement Procedures Act (RESPA) will protect you from any penalties during a 60-day grace period after your mortgage is sold.  If you are charged penalty fees or were never notified at least 15 days before the transfer, you can dispute it.

Get Help From The Experts

Contact The Team At Eric Merchant Today