What happens when your mortgage is transferred?
The advent of mortgage securitization has brought a new level of complexity to the mortgage servicing industry. Traditionally, most banks serviced the loans that they made to homeowners, meaning they collected the payments, kept track of the balance, and handled collections aspects for late payments. Sometimes these procedures were outsourced to a mortgage servicing company.
Nowadays, loans are no longer predominantly held by the banks that made the original loans. They can be packaged and divided into different groups and sold to other banks or investors. This results in a more complex servicing process. Sometimes the homeowner will need to begin sending payments to a different servicing company. It is important to keep track of what’s happening and make sure your loan balance, and payments are not impacted by a change of servicer.