Why Did Your Mortgage Lender Sell Your Loan
If youve ever taken out a mortgage, theres a good chance the lender who made the loan to you sold it to another bank or investor before you made your first payment. Theres also a good chance that if youve had your mortgage for a few years, it may have been sold at least one or two more times. Why all the paper shuffling? The answer is fairly straightforward.
Lenders typically sell loans for two reasons. The first is to free up capital that can be used to make loans to other borrowers. The other is to generate cash by selling the loan to another bank while retaining the right to service the loan. Cash is generated when the old lender charges the new lender a fee for collecting and disbursing the monthly payments. In the end, your loan could be owned by lender A while you make payments to lender B.
On a personal note, I once obtained a mortgage loan from one of the local community banks here in Las Cruces. I was informed at the closing that my loan had already been sold to what financial guru Clark Howard calls a multi mega-bank . In turn, the MMB sold the loan to the General National Mortgage Association . Until the mortgage was paid off, I continued to make my monthly payments to the MMB, who retained the servicing rights, even though Ginnie Mae is the owner of my loan.
See you at closing.
Gary Sandler is a full-time Realtor and president of Gary Sandler Inc., Realtors in Las Cruces. He loves to answer questions and can be reached at 642-2292 or .
Mortgage Loan Servicers And Covid
Your mortgage loan servicer is also the company youll turn to if you need mortgage relief like a forbearance plan or loan modification due to financial hardship.
This was the case for millions of homeowners who needed to pause payments or update their repayment plan during the COVID-19 pandemic.
A new awareness of their mortgage servicer bought new pains for some homeowners.
Hours-long hold times, expensive system glitches,” and were just a few of the cracks that showed up as mortgage loan servicers dealt with an unprecedented wave of loan relief requests.
As a result, many homeowners will likely pay more attention to who their servicer is moving forward.
So, who are the best mortgage servicing companies? How do you know who yours is? And what should you do if you want a different loan servicer?
Who Is My Mortgage Servicer
A mortgage servicer handles the day-to-day management of your mortgage loan account. This includes collecting payments, applying funds, and managing escrow accounts. The servicer is who you contact if you have questions about your mortgage loan account. For more information about mortgage servicing, visit the Federal Trade Commissions website.
Your mortgage servicer is the company that sends you the bill for your mortgage payment. You should receive monthly statements from your mortgage servicer, even if you are in foreclosure. However, you may not receive one if you filed bankruptcy. From time to time, a mortgage servicer may sell the servicing rights to your mortgage. In most instances, you are entitled to notice of the transfer from both your old and new servicer. You should receive this notice even if you are in the foreclosure process. If you do not know who services your mortgage, you may be able to find out your servicer by calling MERS at 1-888-679-6377 or visiting the MERS website. If your loan is not in the MERS system, look for the most recent mortgage statement you have and ask that servicer.
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Public Mortgage Records Search
Almost any public property records website that has a search portal will let you search for properties based on their address, owner name, or by specific document types.
ACRIS typically serves as the most prominent example of this. ACRIS is New York Citys online database of public property documents and records. You can use the site to search for properties and their affiliated documents.
To find mortgage information on a property using ACRIS, simply run a search . Here, you can search for properties based on a document class,
To find mortgage information on a property using ACRIS, you can enter the Search Property Records page of their site. From there, you can choose to search by document type.
From there, you can select Mortgages & Instruments in the document class section, and then select from a number of different mortgage document types.
Many other public records websites around the country let you search by address or by owner name. Not many of those sites make public mortgage records available online, however.
To access public mortgage records at that point, you can utilize a website like NETR Online to search public records. The other option is to physically go down to the county clerks office and gather information in person.
Regardless of how you find and access mortgage information on a property, what you can actually do with that information is the most important part of the equation.
Who Does The Title Search
A title company or attorney will typically take care of the title search. In some cases, the lender or the individual home buyer may take over this process instead.
If you choose to tackle the title search process on your own, then you can seek out the records you need at places like the county courthouse, the recorders office, and the county assessor office.
It might be a good idea to let the professionals handle this part of the home buying process. Legal documents can get confusing to the untrained eye and you dont want to accidentally overlook something important.
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How To Find True Commercial Property Owners
A huge part of commercial real estate business development hinges on the ability to identify decision-makers and get in contact with them.
The problem? Data surrounding commercial property owners has long been hard to find and verify, especially at scale.
Here, well show you how to find commercial property owners and their contact information in ways that are scalable and repeatable.
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Check Your Local Assessors Office
On your local assessors official website, you may be able to look up property tax records. All you need is the homes address. You can learn who owns the home as well as how much property tax they pay.
This is a great way to find out who owns a property for free. Keep in mind you may have to pay for physical documents.
Manage And Track Borrowers Monthly Payments
Mortgage servicers must provide borrowers with a statement for each billing cycle. The statement must show the current payment due, the previous payment made, any fees the servicer has charged , any transaction activity and the servicerâs contact information.
In lieu of statements, the mortgage servicer may give the borrower a coupon book if the loan has a fixed interest rate.
When you send your monthly payment to your mortgage servicer, it sends your principal and interest to the mortgage holder. If youâre paying mortgage insurance premiums, the servicer collects that money and sends it to the right place, as well. When you have enough equity to cancel private mortgage insurance, youâll work with your servicer to get that taken care of.
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Fannie Mae Mortgage Loan Lookup
Our Loan Lookup tool is the path to mortgage help for homeowners with a Fannie Mae-owned loan, including those impacted by COVID-19, a disaster, or housing affordability challenges.
If we own your loan, you may qualify for programs providing payment relief including a forbearance plan or loan modification. Youll also have access to live personalized assistance from HUD-approved housing counselors through our Mortgage Help Network or Disaster Response Network.
To use the Fannie Mae Loan Lookup tool, fill in every field below carefullya mistake or typo can give you the wrong results. Then check the box to provide consent and click Get results.
The Fannie Mae Loan Lookup is provided as a convenience for borrowers. Fannie Mae makes no representation, warranty, or guarantee regarding the accuracy or completeness of the results. A search that results in a Match Found status does not guarantee or imply that you will qualify for a Making Home Affordable® refinance or modification. Information that does not match our records exactly may return inaccurate results. You should contact your mortgage company to verify these results. Making Home Affordable is a trademark of the United States Department of the Treasury.
What It Means For You
When your lender sells your loan, youll still make the same payment every month. Youve already borrowed the money and closed the loan, after all. Even if your loan servicer has their own mortgage rates, having a new servicer doesnt change what youve borrowed, what interest rate youve agreed to and how large your monthly payment is.
Once your lender sells your loan, it will send you a loan ownership transfer notice. The institution that purchased your loan must then notify you within 30 days of the official date of the change. This notice will include the name of the company that now owns your mortgage loan, its address and its telephone number.
The only time problems might arise is if your old or new servicer doesnt notify you in time about the new address to which you need to send your payments. After all, you dont want a late payment on your record because you sent your payment to your old servicer and not your new one. If you do have a complaint about late notices or any other issue relating to the selling of your loan, dont be shy: Report your complaint to both your old lender and your new one. Then file a mortgage complaint form with the Consumer Financial Protection Bureau.
And if you do receive notice that your loan has been sold, dont panic. Just make sure you know who owns your loan now and where your payments need to go each month.
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What If The Bank Goes Bust Before The Closing
Youre preparing to close on your mortgage, but learn that your lender or bank is in dire financial straits. Should you start sweating?
The short answer is no. According to Ailion, any funds you have transferred to an escrow agent should be secure if your prospective lender gets into trouble, but you will have to find a new lender to get a loan.
Typically, lenders cease to underwrite loans if they approach insolvency.
Back in 2008, a few lenders did file for bankruptcy protection post-loan approval and pre-closing, and the borrowers on these loans had to scramble to move their loan to a new lender, Burgelin recalls. Thankfully, because most loans are typically underwritten by Fannie Mae, Freddie Mac or FHA guidelines, the appraisal you already had done can be shifted over to a different lender for the same loan type.
Review And Keep Your Records
Review all letters, emails, and statements when you get them from your mortgage servicer. Check that their records match yours. Most servicers must give you either a coupon book or a statement every billing cycle . Servicers must send periodic statements to all borrowers who have adjustable rate mortgages, even if they decide to send them coupon books.
Your coupon book or statement will have your servicers contact information. That way, you can learn more about your account, get an explanation of a charge, or confirm that theyre crediting your payments properly and on time.
Even if you dont have any problems with the servicer, keep your mortgage statements, coupon books, records of your payments , and every document you send to the servicer. If you have a problem down the road, youll want those records to confirm your payment history and any communications with the servicer.
Track down late statements
If your statement is late even by just a few days call the mortgage company to track it down in case theres a problem with your account. If your account shows that youre paying late, you could be in default on your loan. Late payments and a default are reported to a credit bureau and will appear on your credit report. That could affect your ability to get credit in the future. Get an explanation for anything you dont understand.
Confirm new servicer name and address before your next payment
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Why Its Important To Know Who Owns Your Mortgage
One of the major requirements for receiving mortgage forbearance under the CARES Act is that your home loan is owned by Fannie Mae or Freddie Mac. If it isnt, you may still be eligible for mortgage relief if your loan is guaranteed by the FHA, VA, or USDA.
Other reasons you may need to know who services, owns, or backs your mortgage include:
- Youre seeking basic information about your loan account, like the amount of your monthly payment, when your next payment is due, or information on late fees that you owe contact your loan servicer.
- Youve fallen behind on your payments and want to discuss alternatives to foreclosure contact your loan servicer first.
- Youre having trouble making monthly mortgage payments and want to take advantage of mortgage relief programs like payment deferral or forbearance contact the owner of your mortgage.
- Youre interested in learning more about other loss mitigation options available to you these options vary based on the entity that backs your loan.
If A Lender Is Holding Your Mortgage Deferment Options Will Be A Lot More Flexible But If Your Mortgage Has Been Sold On The Secondary Market Its Much More Complicated
Do you know whether your home mortgage is owned by a lender or an investor in the secondary market? Probably not. After all, under normal circumstances knowing this is not really necessary. But in a time like this when many people are looking to defer monthly mortgage payments due to financial hardship brought on by the coronavirus pandemic, this is very important to know because it could determine how long you can defer your payments.
CNBC recently reported that some homeowners who had mortgages with Bank of America were struggling to defer payments for more than a few months. One specific borrower mentioned in the article said the bank told her she could delay her $2,200 monthly mortgage payment for three months but then would have to pay the entire sum that was deferred, as well as the current mortgage payment on the fourth month.
Thats not super helpful, considering the pandemic could last for much of the year. When most borrowers defer payments, they prefer to add those payments to the end of the loan so they have time to catch their breath, as opposed to having to pay them in four months.
Image Source: Getty
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Your Mortgage Loan Has Been Sold: Now What
Your mortgage lender likes when you make your payments each month. But your lender often doesnt really make the big bucks from your loan until it sells it to Freddie Mac, Fannie Mae or some other financial institution. So dont be surprised if some time from now, you get a notice in the mail telling you that your lender has sold your loan to another financial institution. Consider working with a financial advisor as you apply for mortgages or seek to refinance an existing mortgage.
If you receive this kind of notice, not to worry. You shouldnt be surprised or alarmed, even if you were aiming to pay off your mortgage early. Your life wont change drastically when your bank sells your loan. Youll still make the same payments, just to a different address.
To Make Sure Your Servicer Gives You Accurate Information About Loss Mitigation Options
Different backers offer various loss mitigation options to borrowers. Your options often depend on what entity, like FHA, VA, USDA, Fannie Mae, or Freddie Mac, owns or guarantees your loan, and you probably have choices. For example, you can get a CARES Act forbearance if you have a federally backed loan, such as an FHA, VA, USDA, Fannie Mae, or Freddie Mac loan. Different investors offer various foreclosure alternatives, too.
But servicers don’t always give accurate information when telling you about what foreclosure alternatives are available. So, you need to know who owns or guarantees your loan to know what options might be available to you. Learn what options are generally offered for your type of loan and be ready to ask your loan servicer about them.
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