Transferring Your Loan
Even though you initially apply for a loan with a particular
mortgage company, there is no guarantee you will always be served
properly by that company. Sometimes the lender will transfer your
services to another company. This means that another party will
begin to collect your payments, manage your account and process
your paperwork. This usually only happens when your lender is
sold, and it can happen immediately following the closing of your
mortgage or years down the road.
Selling or transferring loan service from one company to another
is fairly common in the mortgage industry and it is perfectly
legal. Your loan will most likely be sold along with a large bunch
of other loans. It is rare for only one or a small number of loans
The transference of loans can take place across cities, counties
and even states. It can also happen more than once, being sold
from one company to another and then still to another. The reason
these companies sell or transfer loans is because it is cost-effective
for them to originate loans and then sell them to another company.
Opening loans is the key part of their business, and that way
they make profit.
Don’t be upset about the transfer of your loan, as the
quality of your loan will not change and your payments will remain
the same. Remember that none of it is personal in any way, but
simply a common business practice in the industry.
The company that holds your loan has the right to sell or transfer
it to another company, and your permission is not necessary for
them to do so. Although the lender does not need your approval,
the mortgage company is obligated to informing you open the transfer
of your loan. The transfer of your loan should not negatively
affect your loan or the service you receive. All of the original
terms and conditions of the loan should not change. The interest
rate, duration and term of your loan also should not fluctuate.
The only thing that may change is tax or insurance rate, which
may increase or decrease your escrow account. With adjustable-rate
mortgages the original agreement should hold out with the new
lender, but talk to your new mortgage company’s representative
to make sure that you can still refinance at the time you planned
on refinancing with your former company.
If your loan is transferred, you should be notified by a goodbye
letter 5 to 15 days before your last fee from that company. The
letter will inform you of your new service provider, the new company’s
contact information, and where and when to send your upcoming
Make sure to contact both your old and new service providers
to confirm the transfer occurred and that your information is
correct with your new company. Make copies of the goodbye and
introductory letters with contact information and any documentation
that may be legally relevant if ever needed.