Why Did Wells Fargo Transfer My Mortgage To Specialized Loan Servicing?

Mortgage Sold

Have you always taken out a loan from a mortgage company or bank only to find out a few months downwards the road that it's been sold?

Don't be surprised if this happens to yous -- multiple times -- because it's common that lenders sell mortgages.

Federal cyberbanking laws allow fiscal institutions to sell mortgages or transfer the servicing rights to other institutions.

Consumer consent is non required when lenders sell mortgages.

It might seem alarming because a mortgage is something very personal to a consumer, a symbol of your habitation ownership.

Merely banks and other financial institutions view your mortgage differently.

To them, your mortgage is only some other financial nugget. And that ways lenders handle your habitation loan much more differently than you might.

Questions might be swirling around in your head. Why is your servicer immune to exercise this? What does it hateful for you? Are the terms of your mortgage going to change?

Don't panic if y'all discover that your mortgage now belongs to another establishment. Recall: a loan is a loan no matter who owns it.

Your involvement rate, payment amount, type of loan (fixed charge per unit or ARM), etc. cannot change just because your loan has been sold.

The only thing that's changing is the address you're sending your payments to.

To help put your heed at ease, here are answers to all of the questions you might have about your lender selling your mortgage:

Why do lenders sell mortgages?

There are basically two master reasons why a lender might sell your mortgage.

1. To gain capital

When a loan gets sold, the lender has basically sold servicing rights to the loan, which clears up credit lines and enables the lender to lend money to the other borrowers.

Much as we might think that fiscal institutions have countless amounts of greenbacks on manus, the truth is that lenders needs to go on a large enough pool of coin on hand in lodge to lend to other people.

Let's say the bank is lending you $200,000 to buy a home.

Virtually mortgages last for 15 or thirty years -- and you're certainly not the only person taking out a mortgage.

The bank would need to have billions of dollars in greenbacks to event loans to everybody.

That's one of the main reasons why information technology sells loans like yours.

2. To make money

Lenders can brand money by charging fees when the loan originates, earning interest from your monthly payments, and selling it for commission.

Administering a loan has value considering it earns the mortgage servicer money -- a small percent of the involvement rate you pay will get to the servicer.

Is your mortgage being sold a bad matter?

In most cases, no. Unless yous are delinquent or behind on payments, the terms of your loan volition not alter because you've already borrowed the coin and signed off on it.

What rights do I take?

The most of import matter to take note of is that your lender must provide you with a loan ownership transfer notice when your mortgage is sold.

The new possessor of your loan must notify yous inside 30 days of the effective engagement of transfer.

Included in this notice should be the following information:

The new owner'southward name
Address and telephone number of new owner
The person who can resolve issues concerning your loan payments or whatsoever correct to rescind the loan (if different from new owner)
Date of transfer
Whether the transfer of buying is recorded in public records.

Do the terms of your mortgage modify?

The short answer is:no. The new servicer of your loan is legally non allowed to modify the terms of your previous loan.

This means that things similar your interest rate, life of your loan, and payment date must remain the aforementioned, fifty-fifty under the new lender.

In regards to theescrow in your domicile, the new servicer will reevaluate your loan to determine if a sufficient corporeality of money is being collected each calendar month.

If your escrow, as well as your monthly payments towards property taxes, mortgage insurance, and/or hazard insurance are accounted insufficient, it's possible the new servicer of your loan could increase your monthly payment.

It's too important to annotation that your new mortgage servicercannot force you to establish an escrow account,if information technology was previously stated that you lot were contractually able to pay taxes and insurance on your own under your former loan.

However, if this stipulation wasnot specifically stated in your previous mortgage contract, or was just never discussed between you and your previous lender, then it's very possible (and legal) that your new servicer can crave you to plant an escrow account with them.

How come I didn't know this transfer might happen?

Did you read your contract? Really? It's mandatory for lenders to disclose whether your loan volition be sold and the percentage of loans it sells.

Amend dig out that mortgage contract again.

What should I exercise once I hear from my new servicer?

You'll desire to read the showtime mortgage statement you receive from your new lender advisedly -- verify that all the information it lists is true and authentic.

If you lot're in the eye of applying for a loan modification, yous may have to begin the process all over again.

Annotation that dealing with a new company for your mortgage ways that you may accept to make full out paperwork that might look different, talk with new staff, and send your payments to a new address.

Don't be afraid to reach out to your new servicer if you have questions.

What if I run into a legal issue?

"Consumers should not exist collateral damage in the mortgage servicing transfer process," said Consumer Financial Protection Bureau Director Richard Cordray.

Mortgage companies have a legal obligation to protect consumers during loan transfers between mortgage servicers.

That means paperwork should non be lost, servicers should not lose runway of a homeowner'south loss mitigation plans, and they should not hinder a consumer'south chance to save his or her abode from unnecessary foreclosure.

Understand that the process of transferring servicing rights is challenging logistically.

It might involve moving thousands of loan documents, which explains why problems ascend.

If your payment is returned and your servicer notifies you that information technology's no longer servicing your mortgage, know your rights.

You do not desire to end up in a situation where you receive a find in the mail stating that you're late on a payment -- so wonder confusingly why you were never notified that you needed to send your payment to a new servicer.

If you take a complaint or question about the transfer of your loan, y'all accept a legal right to send a written asking or note to your previous lender.

Past law, your lender is required to respond in 20 business days within receiving your letter, andin 60 business organisation days,must either correct the addressed problem (and besides give you notice that it has been corrected), or requite you, the borrower, a written detect why the problem is non beingness corrected.

Either manner if yous need a trouble corrected or are only requesting information,you will get a response from your lender -- it'due south the law that they do and then.

Last thoughts

Sympathise that both your old and new servicers must notify you about the transfer of your servicing rights no less than 15 days before the constructive date of transfer.

If you never received the servicing transfer notice, y'all tin can also file a complaint with the CFPB online. You should also consult an chaser.

Remember, receiving a find that your mortgage has been sold should non be taken personally.

As long as you have been notified in a timely manner, your new servicer accurately lists your information, and you send in payments to the right accost yous should have naught to worry almost.