|Your rights if your loan is sold|
Julie Garton-Good, GRI, DREI
"Selling the loan" typically means selling the
servicing rights to the loan. It merely means that you'll be making your
payments to another company. It may not ever happen to your loan; yet again, it
might happen several times during your loan's thirty-year life. You get a letter
saying, "we're writing to inform you that your loan as been sold".
When that happens, you'll be glad you knew what it meant as well as your rights
as a borrower. When you first applied for the mortgage, the lender gave you
information about the likelihood of your loan being sold to another investor.
These guidelines are federally mandated. In fact, you must hear from both the
lender saying "goodbye" and the one saying "hello" to your
loan and they both must provide you with the following information in a timely
What the "goodbye" lender must provide you:
At least 15 days before the date your next payment is
due, the lender selling your loan must notify you in writing, provide you (on
their letterhead stationery) the name of the new company, its full address, a
phone number (800 number preferred) and the name of a contact person who can
answer your questions.
What the "hello" lender must provide you:
The company purchasing your loan must send you the
same information in the same time frame, complete with the name of a real person
(not a voice mail system) that you can speak to if you have questions. The
federal government mandated these guidelines several years ago when bogus
mortgage scams had unsuspecting consumers re-routing their monthly payments to
blind post office boxes when, in fact, their loans had never been sold. Some of
the buyers found out too late--when they received loan delinquency notices from
the true, original service departments of the company holding their loan. That's
why if you do not receive both the "goodbye" and "hello"
letters, contact your current mortgage servicing department for clarification.
Federal guidelines prohibit your loan from being termed "delinquent"
for a period of sixty days during the transfer of servicing. You have time to
check out the facts before making any change, and don't let anyone convince you
to the contrary!
If you'd like more information, an excellent free booklet is
available entitled "When Your Loan is Transferred to Another Lender,"
available from the Mortgage Bankers Association of America, 1125 Fifteenth St.,
NW, Washington, DC 20005