It’s been something of a common practice for lenders to sell mortgages for years now. And with some companies going under, and other buying up the leftovers, it’s possible your mortgage may change hands multiple times over the life of the loan.

Who Buys Mortgages?

A mortgage can change hands in several ways: it can be sold, your lender can be bought up by another company or your lender may hand over the rights to administer your loan to a mortgage servicer. A mortgage servicer is typically a company that specializes in processing and administering mortgages. Among other duties, a mortgage servicer collects monthly payments, pays your property tax and insurance from your escrow account and handle any delinquencies.

Your Rights When Your Mortgage Changes Hands

Because there are more than a few opportunities for something to go wrong when your lender hands over your mortgage to someone else, it’s important to know your rights.

• Notification in Writing: In the event that that your mortgage is sold, or even transferred to a new servicer, both the original servicer and the new one are required by law to notify you — including giving you full contact information for the new servicer, as well as the date of the changeover. These notifications are typically mailed, making it even more important that you open any correspondence you receive from your lender. Unopened mail still qualifies as proper notification by your mortgage servicer.
• The Terms of Your Loan: Any mortgage servicer who purchases your loan is required by law to adhere to the terms and conditions of your original mortgage agreement. The only exception are any terms directly relevant to how your mortgage is administered.
• Grace Period: When your mortgage servicer changes, you have a 60-day grace period. During that time, you will not be charged a late fee if you accidentally send a payment to your previous servicer.
• Dispute in Writing: If you have any questions or disputes with your new mortgage servicer, you must continue to make payments while you settle the dispute. However, put your dispute in writing — mortgage servicers are required to investigate such disputes and resolve them within 60 business days according to law.

Adjusting to a New Servicer

You’ll typically receive new information on submitting your payments, including a new address for mailing checks. It’s important to make sure that your payment is going to the correct recipient as soon as possible — if you rely on any sort of online bill payment system, make sure that you make necessary changes so that any automatic payments are handled correctly.

It’s also crucial to go over your mortgage statements with a little extra care in the months after your mortgage changes hands. Have all payments been recorded correctly? Have insurance premiums and taxes been paid on time? It’s possible for something to fall through the cracks, especially when you consider the fact that hundreds or even thousands of mortgages were probably sold as a package deal, including your own.

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