Q: My mortgage payment history is a little complicated: For a while I was making extra payments, but later I fell behind on my regular monthly payments. This situation is now further complicated because my mortgage loan was just sold to a new servicing organization. Will they simply pick up my payment schedule where it left off, or will I have to get caught up all at once?
A: Whenever a loan is sold, it is a good idea to contact the new servicer to get the details on what their records show, including your payment history, remaining balance, and amortization schedule for future payments. The Consumer Financial Protection Bureau found that when loans are sold there is often poor communication between the two financial institutions, and poor communication between the new loan servicer and consumers. This has resulted in misunderstandings about how much borrowers owe, and even confusion over something as simple as where to send the payments.
In a perfect world, of course, the mortgage lenders and servicers would take care of all this, but since you are on the hook financially, you should take the initiative and contact the new loan servicer. Some of the things you should try to find out include:
- Payment processing details, including where to send your checks and what account number to note on them for proper crediting.
- Your current balance, to see if this is consistent with your understanding. Be advised that penalties for your late payments may have been added to your principal.
- Your amortization schedule going forward, so you can understand what you owe and when it is due. It sounds like you may have some catching up to do, and you'd be advised to do this as quickly as possible so you don't incur additional penalties and interest.
Mortgage lenders often sell their loans, which is an excellent reason why borrowers should keep meticulous records of their own from their first payment to the last.