Buying A Home Home Loans

What to Expect If Your Mortgage Is Sold to Another Lender?

Written by Rebecca Lake

Signing on the dotted line for a mortgage means that you’re stuck making payments for the next 15 or 30 years but not necessarily to the same lender. It’s not uncommon for banks to buy and sell mortgage loans and federal law doesn’t require lenders to get the green light from homeowners beforehand.

When your loan is sold or transferred to another lender or servicer, you’re still on the hook for the mortgage but how you make your payments may be affected. If you’ve received a notice that your loan has been sold, knowing what to expect going forward can make the change less stressful.

Why mortgage loans are sold

Money is typically the reason why a lender chooses to sell or transfer a mortgage loan. In some cases, it’s done to free up capital which can then be used to make additional loans to new borrowers. In others, the goal is to generate revenue from the loan’s sale. For instance, if your lender sells your mortgage but continues to be the loan servicer, they make money by charging the new lender a service fee.

Whether or not you’ve been making your payments on time or how much you still owe on your loan doesn’t factor into whether your mortgage gets sold or not. Even though you may not view it that way, it’s really nothing personal as far as the bank is concerned.

Understanding your rights

Banks are prohibited from selling mortgage loans without letting the homeowners in on what’s happening. Legally, both the old lender and the new lender are obligated to send you a written notice informing you that your mortgage has been sold within 15 days of the sale. The letters should outline who the new lender is, where to send your payments to, what methods you can use to pay the loan and when your next payment is due.

One of the things that can be the most confusing about having your loan sold is where to send your payment. If you’ve received notices from both lenders, you should make your payments to the new lender going forward. Otherwise, you’ll want to keep paying the old one until you get that second letter in the mail.

While the mortgage is being transferred, you’ll have a 60-day grace period which prevents the new lender from charging you a late fee on a payment. That means that if you pay the old lender in error, you can’t be penalized for it. The new lender also can’t report any late payments on your credit during this period or declare your loan delinquent.

It’s important to note that just because another lender now owns your loan, it doesn’t give them the right to amend the terms of your mortgage, including your monthly payment or interest rate. If you’ve gotten a letter stating that your loan has been sold, that’s likely to be your biggest fear but federal law prevents the new lender from changing your loan in any way.

How having your mortgage sold affects a modification

Loan modifications are designed to make mortgages more affordable for struggling homeowners but having your loan sold can throw a wrench in your plans. If you’re trying to get approval for a modification or short sale, you may have to begin the process all over again if your lender sells your mortgage, which can be problematic if your finances are already tight.

If you’re aiming for a modification, for example, you’re required to make trial payments before it’s formally approved. If you have to start all over again, the new lender may require a higher trial payment amount which can put even more strain on your budget. In the case of a short sale, having to wait a few more months to get some relief will only result in additional damage to your credit if you’re already behind on the payments.

Resolving issues after the loan is sold

Most of the time, having your mortgage sold to a different lender is relatively hassle-free. The biggest inconvenience may be changing your automatic bank draft if you normally have your monthly payments taken straight out of your account each month. That doesn’t mean, however, that some homeowners won’t encounter a speed bump or two along the way.

If you have a problem after the loan is sold, such as a misapplied payment or charges for fees that you don’t recognize, you’re responsible for notifying the new lender in a timely manner. Complaints, questions or requests for information must be sent to the lender in writing in a separate correspondence from your monthly payment. Once the lender receives it, they’re required to respond within 20 business days. If the problem is something that requires some extensive investigation to resolve, they have to handle it within 60 business days.

When getting in touch with the lender directly doesn’t do the trick, the next step is to file a complaint with the Consumer Financial Protection Bureau. This is an independent government agency that oversees consumer protections in the financial sector. If you file a complaint with the CFPB, your lender has to follow-up within 15 days. You can also file separate complaints with the Federal Trade Commission and your state’s Attorney General’s office.

Read the fine print

While there’s nothing you can do to prevent your mortgage from being sold or reassigned, you can take steps to protect yourself against potential issues down the road. When you receive your first mortgage statement from the new lender, take time to go over it carefully to look for errors or discrepancies. If you see something that appears to be incorrect, you’ll need to dispute this information with the lender.

The very worst thing you can do when finding out your mortgage has been sold is to simply shrug it off. At the very least, you’ll want to read your notification letter carefully to find out where your next payment needs to go. Keeping yourself in the loop as much as possible ensures that you don’t run into any major snafus once the transition is complete.

About the author

Rebecca Lake

Rebecca Lake is a personal finance writer and blogger specializing in topics related to mortgages, retirement and business credit. Her work has appeared in a variety of outlets around the web, including Smart Asset and Money Crashers. You can find her on Twitter at @seemomwrite or her website,


  • Our loan was sold to PNC and I did not find out until after the passing of my husband. He took care of the finances so I found out it’s in his name only. I was informed by PNC when they purchased the loan he was on it alone. We are both on the deed from the time we purchased the house, joint tenants. I never signed a quit claim deed to relinquish me portion of the community property. Now what? They put the loan in the estate of my husband. Do I have legal right here?

  • Tia just wondering how your mortgage loan turned out. Did you ever get it straight?? It’s against the law to change from fix to variable. I hope you filed a complaint. I just got sent to another servicer and i’m a bit concerned because i am on a fix mortgage as well. I hope and pray that the new servicer is on the up and up.

  • My new mortgage company has increased my payments in every way, even though I have a fixed rate for 390 months. My original payment was only $511 a month,but in just 6 months they have raised it to $960 a month. And now their saying my escrow is (1,700) in the negative. I have done the math and gone over every document and state I have gotten since I bought my house and have found multiple mistakes in their numbers. I know there wrong, and I have proof, from their own statements. But they still are not willing to listen. I’m at at loss and out money. I feel that they are intentionally trying to make me loose my house.
    Now they’ve put a mark on my credit when i was late (for the first time ) by 12 days. They are intensonally not filling on the day they accept my payment then charging me for it, plus they charge me just to pay my mortgage now. I’m at a loss I don’t have the money to fight but I do have the paper work and the harassment statements they’ve sent saying I’m in mitigation. I am currently up to date and paying what they want. It’s only a matter of time before my two boys and I lose our home to these thieves. I’m not quitter by all means just ask my doctors. I’ve beat cancer broken my back three times and still went to work 50 to 60 hours a week so my boys grow up better than I did. Not asking for anything just doing some venting but if anybody has any advice for me I would be appreciated. Ps.not much of a writer

    Always thought if I lived right,raised my boys right,everything would be right,boy was I wrong.

    Sincerely not giving up Ronny G.
    Venus tx.


  • Wells Fargo sold my loan knowing that the deed said it belonged to someone. A public adjuster sold the home in a foreclosure sale. The property tax department has name the public adjuster as the owner but they continue to escrow my loan. How can you sale a loan with a dispute of ownership?

  • My mortgager has my principle balance 10k
    More than it was when I bought the house for, I’ve lived here 20 years.. Wells Fargo,
    Never took equity loan

  • My old lender I was on a fixed loan now on the new I’m on a variable. How do they just put you on what they want you to have? I had a 15 year loan and after I paid 10 years they sell my mortgage to another company and they put me on a variable rate. Can they keep increasing my payments where I can’t afford them? I have 5 years left I don’t want to lose my home.

    • Tia just wondering how your mortgage loan turned out. Did you ever get it straight?? It’s against the law to change from fix to variable. I hope you filed a complaint. I just got sent to another servicer and i’m a bit concerned because i am on a fix mortgage as well. I hope and pray that the new servicer is on the up and up.

  • What should I do if I never receive notice from my old bank but a new company has already started sending me statements and requesting information?

  • My question: How much is a mortgage or loan sold for compared to face value. Eg, a $70 thousand mortgage. How much would it sell for? Bank to Bank…

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