August 1st, 2010

1 Comment

In the mortgage industry, it is very common that a mortgage is sold to another institution. Your lender can also sell loan servicing part to another lender. This means that you will make payments under the same terms to the new lender. Everything will be transferred to the new servicer. If you have a pending loan modification application, it will get transferred as well.

If you are behind the payments and already received the notice of default, the loan does not usually get bought by other lenders. No servicer would want to purchase loans that are not current. By the same token, loans in the process of modification are also unlikely to be bought because the borrowers are mostly having financial hardship. These borrowers may already be delinquent, or are becoming delinquent very soon.

In the event that the loan is being purchased and servicing is transferred to other lender, don’t believe your loan modification application will be transferred seamlessly. You should immediately call the new bank to verify all the documents have been transferred.

Since your new bank may have different requirements or process for mortgage modification, you will need to provide updated or even additional paperwork. More often than not, you almost have to start loan mod all over again.

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One Response to “What Happens to Your Mortgage Mod When Loan Servicing is Sold to Another Lender”

1. Home for Sale in Granbury, TX says:

   September 8, 2010 at 4:25 am

   Hey,

   I really like concept of your post, as per my opinion you completed a very good home work before write that post.
   And your post show your concept regarding real estate world.

   Thanks

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