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Mortgage Rates Remain the Same, Even When the Name on the Bill Changes

Posted by  on Jun 17, 2009
 

As some homeowners already know, your home loan might move from lender to lender, even if you intend to stay put for the next thirty years. Mortgage lenders frequently sell portions of their portfolio to each other, especially when trying to consolidate similar loans into marketable investment securities or keep from accumulating too much risk (such as having too many loans in the same part of the country). Knowing who actually holds the title to your home becomes especially important during the refinance or the sale of your property.

Why the Name on Your Mortgage Statement Could Be Changing

In many cases, your lender may have outsourced the work of servicing your loan to a third party. Other times, your original home loan provider may have sold the loan to another company that agrees to its terms. However, the shifting banking industry has created another situation where homeowners must start writing mortgage payment checks to a different party. Larger banks and capital companies have gone on a buying spree, gobbling smaller mortgage lenders whole during this period of low market capitalization.

What Happens When Your Mortgage Servicer Changes
If your mortgage lender has been bought out, you probably won't need to do much more than write a different name on your check each month. However, if your mortgage servicer has changed, you must be careful to send checks, with updated account information, to the right address each month. At least fifteen days before taking over your account, a new mortgage servicing company must send you written notice of the change. Federal regulations obligate new servicers to verify your personal information, and to provide you their customer service phone numbers.

Don't Get Scammed and Get the Credit Your Deserve

Federal law states that mortgage terms cannot be changed no matter who collects your payments. Be sure though that your payments are being credited to your account correctly--when someone else takes over your loan the transition isn't always perfect. Check with your current servicer about future changes and continue to make your payments to the same address until you get TWO notices (sometimes called transfer letters). One will be from your current lender and one will be from the new lender. Watch out for crooks! With all the publicity buyouts have received, con artists are taking advantage. Some may deliver notices telling borrowers to make their checks out to a new lender and send them to a new address-and you might find yourself funding some creep's permanent exit to Antigua. Verify also that your taxes and insurance are being paid by your lender if these amounts are included in your mortgage payment (impounded).

Each year, a handful of homeowners seek assistance with payments made in error to former servicing companies. Homeowners that rely on automated online banking services tend to experience the most problems, especially when they fail to review mailed statements. As long as you make your payments on time and to the correct address, your new servicer will continue to honor the mortgage rates and terms extended by your original lender.

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