What Happens If My Mortgage Is Sold to a New Owner?

If your mortgage lender sells your loan to a new owner, the new owner must, by law, notify you of that fact. This notice is different from the notice that your mortgage servicer must send you if the servicing rights are transferred.

Basically, you'll get updated information about who owns your mortgage loan. You might need to send your payment to a different entity if your lender was also your loan servicer. However, if the lender was separate from the servicer and the servicer doesn't change, you don't have to do anything new with your payments.

Mortgage Lender vs. Loan Owner vs. Mortgage Servicer

First, let's define the terms "lender," "owner", and "servicer" when it comes to the mortgage business.

Mortgage Lender or Loan Owner

The mortgage lender is the financial institution that loaned you the money. The lender is the loan owner at this point.

Later on, the lender might sell the mortgage debt to another entity (often called an "investor"), which then becomes the new owner of the loan.

Mortgage Servicer

A mortgage servicer handles the day-to-day tasks associated with mortgage loans, such as collecting and processing payments, responding to borrower inquiries, managing escrow accounts, and processing foreclosures.

The servicer might be the lender that gave you your loan or a subsequent owner of the loan. Or, it might be a separate company that acts on behalf of the loan owner. If a separate company is the servicer, the owner of the loan will rely on that company to handle the management of your loan account.

Does My Mortgage Contract Change When My Loan Is Sold?

Mortgages are bought and sold frequently in the mortgage industry. The sale of your mortgage loan to a new owner doesn't affect the terms or conditions of the mortgage contract.

Notice About a Mortgage Loan Ownership Transfer

In 2009, President Obama signed the Helping Families Save Their Homes Act of 2009 into law. Among other things, it amended the Truth in Lending Act to require that borrowers get notice when the mortgage debt on their primary home has been sold, transferred, or assigned to a new creditor.

When you'll get notice about the new owner. The creditor that is the new owner or assignee of the mortgage debt must notify you about the change of ownership no later than 30 days after the sale, transfer, or assignment.

What the notice will say. The notice that your new lender sends to you must include:

• its identity, address, and telephone number
• the date of the transfer
• how to reach an agent or party having authority to act on behalf of the new owner
• the location where the transfer of ownership of the debt is recorded in the public records, and
• any other relevant information regarding the new owner.

How Can I Find Out What Company Owns My Mortgage Loan?

Your loan might change hands more than once. If you lose track of what company currently owns ("holds") your mortgage, and you want to find out, see How Do I Find Out Who Holds My Mortgage?

Your Servicer Might Not Change If the Loan Ownership Changes

If your mortgage debt is sold and you get an ownership transfer notice, this doesn't necessarily mean that the servicing rights to the mortgage were also sold or that you'll get a new servicer.

How you'll know if your servicer changes. In most situations:

• your old servicer must send you a notice of servicing transfer not less than 15 days before the effective date of the transfer and
• your new servicer must provide a servicing transfer notice not more than 15 days after the transfer date.

Or the servicers might choose to send a combined notice not less than 15 days before the transfer.

If you have questions about your loan, contact your servicer. It's important that you send your monthly payments to the servicer of your mortgage, not the loan owner—unless the owner is also the servicer. You should also direct any questions that you have about your loan to your servicer.

How you can find out who your servicer is. To find out who your servicer is, check your monthly mortgage billing statement or payment coupon book. The servicer is the company that you make your payments to.