|What to do if your mortgage is sold
Julie Garton-Good, GRI, DREI
found out five days before our next payment was to be made that our loan was
sold. We sent the payment and don't yet know if it was credited correctly.
Aren't there guidelines that lenders have to follow for a more timely
notification to homeowners?
do exist to protect you when your mortgage is sold to a new investor. Just
because the maintenance or "servicing" of your loan has changed hands,
there should be nothing that adversely affects you and your mortgage.
By law, the original lender should send you a "goodbye" letter at
least 15 days before the date your next payment is due. The letter should state
who your new servicing company will be, where it is located, the name and phone
number of a contact person or department and where you should send your next
You should receive a "welcome" letter from the new servicer
outlining the same information.
It is very important that you receive both letters and that they are on the
company's letterhead. If you receive only a letter from the new servicer, be
sure to call your original lender to verify that your loan actually has been
transferred. Several "bogus" operations have recently attempted to
intercept mortgage checks by claiming to be the new servicing company.
If your payment is made through automatic checking withdrawal or electronic
transfers each month, you will need to cancel your present arrangement and fill
out new forms. Since this often takes time, you may need to send a check
directly to the new company before the first withdrawal is received by the new
servicer. Your "welcome" letter can help you determine this.
A free booklet entitled "When Your Loan is Transferred to Another
Lender" is available from the Mortgage Bankers Association of America. You
can request it by writing to 1125 Fifteenth St., NW., Washington, D.C., 20005.
mortgage loan was recently sold to another company and our payment was late
because we didn't know where to send it. Now they're asking us to pay a late
fee. Can they do this?
Federal law protects the consumer against situations such as yours when lenders
sell the servicing rights to loans.
If a borrower sends a payment on time, but to the wrong company, late fees
will be waived for up to 60 days after the loan transfer.
Make a note of your circumstance on the face of the next payment coupon you
send the letter -- but take a photocopy of that note before you send it.