You spent a lot of time researching, choosing, and buying a Kansas City mortgage only to find that your mortgage company has sold it to another company. You’re understandably confused. How did this happen and what’s the point? Why go to all the trouble of choosing a mortgage company if it is just going to sell your mortgage to another company anyway?
Don’t panic! A mortgage company selling your mortgage to another is a common practice. Some reasons your mortgage might be sold to another mortgage company are:
- The mortgage company needs to free up its capital
- To make money off of the loan
Is My Mortgage Being Sold a Bad Thing?
Generally speaking, no, your Kansas City mortgage being sold is not a bad thing. Unless your loan is delinquent or you are behind on your payments, the terms you agreed upon when buying the mortgage will not change once it is bought by another company.
In your contract, it is mandatory to state that your mortgage can be sold at any time. Make sure to read your contract carefully and don’t be surprised when it happens. Your mortgage company is also required to provide you with a notice of a loan ownership transfer.
The consumer should not take the fall should something happen during the transfer process. If paperwork is lost during the transfer, or you were never notified that you must now pay another provider, know your rights and your legal options. You can file a complaint with the Bureau of Consumer Financial Protection and consult an attorney. If you send your payment to your old lender by mistake, the Real Estate Settlement Procedures Act (RESPA) will protect you from any penalties during a 60 day grace period after your mortgage is sold.
A reason your Kansas City mortgage might have been sold was so the mortgage company can make money. This thought may seem nefarious, but don’t worry. Like any other business, mortgage companies need to make money in order to stay in business and be able to lend money to you and other borrowers.
Freeing Up Capital
Again, like any other business, mortgage companies don’t have an endless supply of money in which to work with. Selling your Kansas City mortgage frees up capital and lets the lender provide money to other borrowers who need it. Freeing up capital also allows the company to invest in other opportunities.