How Do I Know If My Mortgage Was Transferred?

The bank or other lender that owns your mortgage loan might eventually sell the loan or transfer the mortgage servicing rights to another company. If the lender transfers either the mortgage loan or the rights to service it, you'll receive notice about the transfer in the mail.

What Is a Mortgage Loan Transfer?

After you take out your mortgage loan, it's likely that the original lender will eventually:

• sell the loan to a new owner, called a "holder" or "investor," or
• transfer the servicing of your loan to a new servicer, which means the right to manage the loan is transferred.

Loan transfers are different than servicing transfers.

Why Do Lenders Transfer Mortgages?

Mortgage loans and the rights to service them are frequently bought and sold between banks and investors. Lenders sell loans for different reasons, such as to raise money to make more loans or to reduce their risk by, for example, getting rid of subprime loans. Investors also purchase loans for various reasons, such as to increase their portfolios.

Servicing transfers also happen for different reasons. For instance, mortgage lenders routinely transfer servicing rights to servicers who can better service the loans. For example, some servicers specialize in servicing defaulted loans.

How Will I Be Notified If My Mortgage Loan Is Transferred to a New Owner?

After your mortgage lender gives you a home loan, it might sell that loan to a new owner. The new owner then becomes the creditor (the entity you owe money to). The terms of your loan won't change just because it's sold. For example, the interest rate, the monthly payment, and the loan term, will remain the same.

If your lender sells your mortgage loan, the new owner must, by law, notify you.

Loan Ownership Transfer Notices

If your current lender transfers ownership of your loan to a new owner, the new owner must send you a notice no later than 30 days after the date of the transfer. (15 U.S.C. § 1641 (2024).)

Contents of the Transfer Notice

The notice must include, among other things:

• the identity, address, and telephone number of the new creditor
• the date of the transfer
• how to reach an agent or party having authority to act on behalf of the new creditor, and
• the location of the place where transfer of ownership of the debt is recorded. (15 U.S.C. § 1641 (2024).)

This notice is in addition to any notices you might receive about the transfer of servicing rights for your loan.

What Happens If My Mortgage Loan Is Transferred to a New Loan Servicer?

Again, servicing transfers are very common in the loan industry. When you take out a mortgage loan, it's likely that the lender will transfer your loan servicing to a new servicer sometime down the line.

The only thing that changes with the transfer of servicing rights for your mortgage is where you'll send your mortgage payments. If you make your payments online, you'll need to tell your bank or credit union to make the payments to the new servicer. Much like with a loan transfer, the terms of your mortgage loan, such as the interest rate, the monthly payment, and the loan term, won't change.

If you have questions about your mortgage account going forward, you need to direct those questions to the new servicer.

How Mortgage Servicing Works

Mortgage servicers process loan payments and manage the loan account on behalf of the loan holder. The servicer is the company to which you make your payment. The servicer then forwards the payment (less its fees) to the investors in your mortgage. The servicer also handles paying the insurance bills, property taxes, and mortgage insurance (if applicable) if you have an escrow account.

Sometimes, the owner of the loan will also service it. Or the mortgage loan owner might sell the rights to service the loan to a different company. Or the owner of the servicing rights might hire a vendor, called a "subservicer," to take on the servicing duties rather than servicing the loan itself.

How Will I Be Notified If My Mortgage Loan Is Transferred to a New Loan Servicer?

If the right to service your mortgage loan is transferred to a new servicer, you'll generally get two notices:

• a notice from your current mortgage servicer at least 15 days before the effective transfer date, and
• a notice from the new servicer not more than 15 days after the effective date of the transfer. (12 C.F.R. § 1024.33 (2024).)

The current servicer and the new servicer may send a single notice, in which case, it must be provided to you at least 15 days before the servicing transfer date.

Contents of the Transfer Notice

The notice(s) will include:

• the date the right to service your loan transfers to the new servicer
• the date on which the old servicer will stop accepting payments on the loan
• the date on which the new servicer will begin to accept payments (the dates should either be the same or consecutive days)
• contact information for the old and new servicer if you have questions about the servicing transfer
• whether the transfer will affect the terms or the continued availability of mortgage life or disability insurance, or any other type of optional insurance, and any action you have to take to maintain such coverage, and
• a statement that the transfer doesn't affect the mortgage terms or conditions (other than those directly related to the servicing of the loan). (12 C.F.R. § 1024.33 (2024).)

In addition, you get a 60-day grace period after the transfer. (12 C.F.R. § 1024.33 (2024).) So, the new servicer can't consider your payment late or charge you a late fee if you mistakenly send your mortgage payment to the old servicer during this time as long as the old servicer receives the payment before the due date, including any grace period allowed under the mortgage contract.

What Should I Do After Receiving a Loan Servicing Transfer Notice?

Once you find out about a servicing transfer, you should start sending your payments to the new servicer. Even though you get 60 days after the servicing transfer date to switch your payment, it's best to start sending your payments after the effective date of the servicing rights transfer. After you send your mortgage payments to the new servicer, you should monitor at least two payments to ensure the new servicer is correctly applying them to your account.

If you inadvertently send your payments to the old servicer after the servicing transfer, and your payments aren't credited to your account, send both servicers a notice of error under the Real Estate Settlement Procedures Act (RESPA). (12 C.F.R. § 1024.35 (2024).) And start sending your payments to the new servicer.

What Should I Do If I Don't Receive Proper Notification of a Mortgage Servicing Transfer?

You can also send a notice of error to both servicers if you have trouble with your mortgage because the servicer changed, but you never received a notice of the transfer.

On the flip side, if you get a transfer letter saying to send your mortgage payments to a new servicer, but it doesn't look legitimate and doesn't have the information described in this article, contact the old servicer to verify the letter isn't bogus. It doesn't happen very often, but borrowers sometimes get a fake letter saying a new servicer is taking over the servicing of their loan. A scammer pretending to be the new servicer then steals the borrower's monthly payments.

If you get just one letter about a servicing transfer, make sure it includes all required information described above and comes from both servicers. Also, to be safe, contact your current loan servicer to confirm the transfer before sending payments to a new servicer.

Getting Help With Mortgage Transfer Issues

If you don't get a satisfactory response to your notice of error, consider contacting a foreclosure attorney to help you resolve any issues you're having, especially if you're facing a potential foreclosure because of problems resulting from a loan or servicing transfer.