If you’ve ever secured a mortgage or refinanced a mortgage, you very well might have gone through a mortgage transfer of servicing rights. Unless you secured your mortgage from a major bank, your lender would have sold your mortgage to a large bank for servicing. Smaller lenders and banks don’t have enough capital to service mortgages until completion, so they sell them usually prior to closing. Within the past year I’ve secured my first mortgage, as well as, refinanced my first mortgage. In both instances the mortgage transfer of servicing rights were slightly different.
When I recently refinanced my mortgage, I found a lender who was able to offer me a great rate with low closing costs because they did everything in house. I’m not completely sure what that means, but it has something to do with performing all of the tasks (securing the loan, underwriting, etc) all within a very small amount of time. Because they didn’t have to lock anything down for an extended period of time they could reduce rates and closing costs.
At closing some of the documents I signed pertained to the sale or transfer of servicing rights. It stated that my lender had sold my mortgage to Chase effective October 1st, which coincided with my first mortgage payment. I was given contact information for both my lender and Chase.
I don’t know why they have to make all of the documents that you sign when you close on a mortgage so difficult to understand, but I wasn’t quite sure where my first payment should be sent. I called Chase and they said they didn’t have my information yet. I called my lender and two days later they have yet to return my call.
In the end, I decided to send my check to Chase as I’m sure my lender has washed their hands of my loan already. I just don’t understand why Chase wouldn’t have my information yet. It would make sense to me to have an account set up and to have contacted me to set up online payments if I wanted to do so.
When I secured my first mortgage, it was with a different lender and they sold it to Wells Fargo. As much as I don’t like how Wells Fargo treated my attempts to refinance my mortgage directly through them, they handled the transfer of my servicing much more efficiently. I had a letter in the mail a week or two after closing that directed me how to set up my online account. I then called and set up my online payments and talked to a real live person who told me everything was set up for the next payment and I didn’t have to send a check.
I suppose those are the two ways you might have to deal with a mortgage transfer of servicing rights. Either they contact you before your first payment is due, or they contact you after the official transfer date. I’m hoping Chase contacts me soon. I’m one of those people who likes to have all bills set up to be paid automatically so I don’t accidentally forget a payment.
Has anybody else had interesting stories regarding a mortgage sale of servicing rights?
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