My Mortgage Loan Servicer Is Changing, What Should I Do?

The only way to change mortgage servicers is to refinance your loan and move to a lender that services the loans they originate. Keep in mind, just because a company services a loan today doesn’t mean they’ll continue to do so long term.

What does it mean when loan servicer changes?

After a servicing transfer, you get a set amount of time during which you may send your mortgage payments to the old servicer rather than the new servicer, even though the new servicer is the proper recipient. The old servicer then has to forward the payment to the new servicer or send it back to you.

Is it normal for mortgage companies to change?

From the perspective of a borrower, the ‘sale’ of your mortgage usually means that the servicing of your mortgage has transferred to a new company, meaning you will be sending your monthly payment to a new company. It is also not uncommon for you mortgage to be ‘transferred’ from one mortgage servicer to another.

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Can I sue my mortgage servicer?

As mentioned above, if your mortgage lender commits negligence, you may sue your mortgage lender. Examples of this can include where they negligently fail to include terms in the loan agreement that were agreed to by both parties, or if they breach their fiduciary duties.

Why was my mortgage transferred to another company?

When a loan gets sold, the lender has basically sold servicing rights to the loan, which clears up credit lines and enables the lender to lend money to the other borrowers. Another reason why a lender might sell your loan is because it makes money off the sale.

How can I stop my mortgage from being sold?

How to Avoid Having Your Mortgage Sold. There is a clause in most mortgage contracts that says the lender has the right to sell the mortgage to another servicing company. 6 If you’re getting a notice that your loan is being sold, you have two options: go along with it, or refinance with another company.

What is the loan forgiveness program?

The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on your federal Direct Loans after you make 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying public service employer.

Can I change mortgage companies without refinancing?

Can I switch mortgage companies without refinancing? No, borrowers do not choose who services their mortgage. If you’re unhappy with your servicer, you’ll need to refinance to a new loan, using a lender that does not work with that servicer.

Can a bank change the terms of a mortgage?

It is very common for mortgage loans to be sold by the originating lender to another loan servicer. It can be jarring to have to switch what bank you make your payment to, but rest assured that when a mortgage loan is sold, the new lender cannot change the terms of the loan in any way.

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Why would a bank sell your mortgage?

Why Banks Sell Mortgages Banks make money off your mortgage loan by collecting interest payments. So if they want to make a quicker profit, they’ll sell your mortgage loan for a commission. That provides instant cash. Your lender might also sell your loan as a way of freeing up capital.

Can a loan servicer foreclose a mortgage?

Servicers cannot foreclose on a property if the borrower and servicer have come to a loss mitigation agreement, unless the borrower fails to perform under that agreement.

What is a respa violation?

When any payment has been made or received for anything considered of value in exchanges for a referral of a settlement service in the real estate deal, the person doing so is violating the RESPA. This means if one company provides gifts or services for a referral, they are usually in violation.

Do banks make mistakes on mortgages?

Mortgage servicers sometimes make serious errors when handling a homeowner’s loan account. Fortunately, a federal law, the Real Estate Settlement Procedures Act (RESPA), provides a way for you to make the servicer correct the error if you believe it made a mistake when managing your mortgage payments.

Can I sell my mortgage to another bank?

Yes. Federal banking laws and regulations permit banks to sell mortgages or transfer the servicing rights to other institutions. Consumer consent is not required. However, the bank or new servicer generally must comply with certain procedures notifying you of the transfer.

Why is my mortgage being sold so often?

In hopes of a quicker profit, lenders will often sell the loan. If servicing a loan costs more than the money it brings in, lenders may attempt to sell the servicing of it to lower their costs. The lender may also sell the loan itself to free up money in order to make more loans.

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Is there a grace period when your mortgage is sold?

While the loan is being transferred, borrowers are afforded a 60-day grace period that prohibits the new lender from collecting late fees or declaring a loan delinquent. In addition, the terms of your original mortgage are set in stone and cannot be modified by the new lender or servicer.

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