Did you take out a loan from a mortgage company or bank only to later find out that it was sold to another party? If this has happened to you, don’t be surprised because it is actually very common for lenders to sell mortgages.
Under Federal banking laws, financial institutions are allowed to sell mortgages or transfer the servicing rights to another institution. Lenders do not need to obtain your consent to do this. Although you might be wondering why a lender would do such a thing, it is important to remember that a loan is still a loan, regardless of which party owns it. Just because your lender sold your loan, does not mean that the interest rate, payment amount, or type of loan will suddenly change. The only thing that will change is the address you send your payments to. Below, we answer some common questions about mortgages that have been sold by lenders.
Why Did My Lender Sell My Mortgage?
In general, there are two main reasons why a lender might sell your mortgage. The first has to do with clearing up credit lines. By selling your mortgage, the lender can lend more money to other borrowers. The other reason is to make a profit from the sale. By charging fees when your loan starts, lenders are able to earn interest from your monthly payments and then later sell it for commission.
Is It a Bad Thing If My Mortgage Was Sold?
It is usually not a bad thing if your mortgage was sold. However, if you are delinquent or behind on payments, the terms of your loan might change.
What Are My Rights?
Your lender has to provide you with a notice of loan ownership transfer when your mortgage is sold. The party that purchases your loan has to notify you within 30 days of the effective date of transfer.
The following things should be included in the notice of transfer:
- The new owner’s name
- The new owner’s address and telephone number
- The date of transfer
- Whether the transfer of ownership is recorded in public records
Speak to a Consumer Law Attorney
Are you having issues with a mortgage that has been sold to another party? If so, you should consult with our skilled team of consumer law attorneys to learn how to protect your rights. We can review your case and build a strong legal strategy that will produce the outcome you deserve. Let us get started today.
Call (312) 313-1613, or contact our consumer law attorneys in Chicago to set up your free case evaluation.