Your home is one of the most expensive items you will buy in your lifetime that is why it is important to understand several aspects of your loan even after it closes. The aspect I am going to talk about today has to do with the sale of your note (mortgage).
First off if or when your note is sold your rate and term cannot change! That part of the note is set in stone and recorded in your local county records. The lender / note holder can sell the note or have a 3rd party do the servicing (receiving payments, paying escrows etc.) of the note. If the note is sold the old note holder has to disclose 15 days prior to selling the note and the new note owner has 15 days after purchasing the note to disclose. The letter of the new note owner will include: name and address for the new note owner and the effective date of the note sale. These disclosures will be sent to you in snail mail.
At my loan closings I always bring this up and tell my borrowers that if their loan is sold they will receive a “Hello” and “Good-Bye” letter. The “Hello” letter comes from the new note holder notifying the homeowner that their loan has been sold and where to send their monthly payments. The “Good-Bye” letter from the old note holder will notify the homeowner that their note has been sold. If you would by chance only receive one of the letters let’s say you receive a “Hello” letter but not a “Good-Bye” letter I would recommend that you contact your old lender to verify. There has been some fraud going on in this area so it is best to have your backside covered.
Here are some additional suggestions that the FTC (Federal Trade Commission) makes to help protect yourself:
- Read all notices from your mortgage company / mortgage servicer carefully!
- If the servicer ask for proof of homeowners insurance, or tax records. Send it promptly and keep a record, I personally would send it registered mail to make sure you are fully covered.
- Maintain records of all payments (cancelled checks, billing statements and bank account statements)
- Thoroughly read all your mail from your lender.
- If you have a problem and are not able to find a clear resolution with your lender then either contact the FTC or ask your lender for their Ombudsman contact information.
Senior Loan Analyst
(816) 728-1384NMLS # 245378, Mo No. 10-1649-MLO, Ks No. 0009720 360 Mortgage Inc., 28 Westwoods Drive, Liberty, Mo 64068
NMLS # 80777