Will My Mortgage Be Sold?
What happens to your mortgage after you close
After you close your home loan (and this is with any lender) there is a good chance your loan will be sold. Some estimates are as high as 80%-90% of all mortgage loans are sold at least once. Selling mortgage securities has become another way banks and lenders are able to provide more funding for people who want a new home loan.
California Home Loan Tip: When reviewing your loan documents be sure to review the closing statement and note a few times. These two documents are an essential part of your loan and will disclose all fees and costs (closing statement) and the true structure of your loan (note). By law if your rate is an adjustable rate, it has to be disclosed in the note, and if the loan has a prepayment penalty is must be disclosed as well (sometimes in an addendum). As for closing costs, nothing can be hidden and all fees/costs associated with the home loan must be disclosed on the closing statement.
Should you be concerned? Not really as most the time you would never even know. Many lenders retain the servicing rights on the mortgage loan so you would continue to receive the same bill (your interest rate and terms do not change), from the same company month after month. If and when it is sold and a new company will be billing you, you might want to stay on top of them for the first 3-6 months to make sure the transition goes smooth.
With million of mortgages being sold on an annual basis there is bound to be some errors when your home loan transfers from one lender to another. It is important that you open all correspondence letters from your lender. If you’re loan has been sold, and you have a new company servicing the loan, you will be notified by mail. Once the transaction is complete the new lender will send you a letter by mail as well.
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