WHAT DOES IT MEAN WHEN YOUR MORTGAGE GETS SOLD?

WHAT DOES IT MEAN WHEN YOUR MORTGAGE GETS SOLD?

One day, you might open your mailbox and find a letter saying your mortgage has been sold. Don’t panic — you haven’t done anything wrong. This is actually a common part of how the mortgage industry works. Still, there are a few things you should know when this happens.

Why Lenders Sell Mortgages

To your lender, your mortgage is basically an investment — a financial asset. Selling it doesn’t mean you missed a payment or did something wrong. Lenders will often sell mortgages in order to free up capital for future lending. So, when your loan changes hands, it’s simply a business move, not a reflection on you.

What Happens Next

When your mortgage is sold, the law requires that you be notified within 15 days. You’ll get two letters — one from your current lender and one from the new one.

These letters should clearly explain:

• Who your new lender is
• Where to send your payments
• How to contact them if you have questions

It’s important to start sending payments to the new address as soon as possible. But don’t worry — your loan terms (interest rate, payment amount, and due date) can’t change just because the loan was sold.

The 60-Day Grace Period

If you accidentally send your payment to the old lender after the transfer, there’s good news. Under the Real Estate Settlement Procedures Act (RESPA), you’re protected by a 60-day grace period.

During this time:

• You can’t be charged a late fee if your payment went to the old lender by mistake.
• The new lender can’t report it as late to the credit bureaus.
• Your loan can’t be marked delinquent because of the mix-up.

This window gives you a little breathing room in case the transfer causes any confusion.

Double-Check for Mistakes

Although most transfers go smoothly, it’s still smart to check your first mortgage statement from the new lender. Compare it to your last one and make sure everything — balance, payment, escrow, interest — looks the same.

If something doesn’t add up, write to your new lender and explain the issue. The U.S. Department of Housing and Urban Development (HUD) even provides a sample letter you can use.

By law, the lender must:

• Acknowledge your letter within 20 business days
• Fix or explain the issue within 60 business days

If you’re not getting a response, reach out to your previous lender, or file a complaint with the Consumer Financial Protection Bureau (CFPB) — they’ll make sure your concern gets addressed.

The Bottom Line

It’s normal for a mortgage to be sold — sometimes more than once — during the life of your loan. Other times, it may never happen. Either way, there’s no reason to worry.

As long as you keep making your payments on time (to the correct lender), your mortgage and credit will stay in good standing.

The Parham Team believes in educating and engaging our customers throughout the loan process. We look forward to hearing from you to begin that process. Contact us today at 214-679-3396 or schedule a call with a Loan Specialist.