Author: Kat Tretina / Source: Wise Bread
When you were going through the home-buying process, choosing a mortgage company was a big part of that. You likely did painstaking research on each company and carefully considered loan offers before deciding on one.
Despite all that hard work, your mortgage servicer — the company that collects your monthly payments — can change.
And there’s not much you can do about it. If you receive a notice that your mortgage has been sold to a new servicer, here’s what you need to know about the transition.Why mortgages sometimes change hands
It’s quite common for mortgages to be sold. One day, you might find a letter in the mailbox from your mortgage servicer stating that your mortgage has been sold. Mortgages servicers sell loans for several different reasons, including:
- To raise capital: Because mortgages are often repaid over the course of decades, loan servicers would be strapped for cash if they tried to manage every mortgage themselves. Instead, they bundle a group of them together and sell them to other servicers or investment companies to raise capital.
- The company is closing: Some loan servicers close, or merge with other servicers. To complete the transition, they sell the current mortgages to other servicers.
- They’re switching their focus: When a company decides to focus on another area of business, such as commercial real estate, they’ll sell off their existing portfolio.
If your loan servicer sells your mortgage, it’s nothing personal against you. It doesn’t say anything about you or the home you bought. It’s simply a business decision.
How to handle the transition
Here’s how to handle your mortgage being sold to a new servicer.
1. Pay attention to notices
Many people don’t pay enough attention to their mail. They’ll skim through it and toss letters or notices from companies they don’t recognize….
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