Does One Sell Mortgages? – Mortgage Rate Guru

When you apply for a home loan, you shouldn’t be surprised if the lender sells your loan to another company. This is a common practice, and many lenders decide to release the funds by selling your home loan as a bond on the secondary market. So does One sell mortgages as well?

A Mortgage One Inc is a lender that offers a variety of loans, and it can happen that servicing rights of your loan are sold to another company. This, however, will not change any terms and conditions of your loan agreement with this lender.

That means you will be making monthly payments to another company and not your initial servicing company or lender. Find out more about selling mortgages.

Why Does a Lender Sell Mortgages?

When applying for a mortgage, you are signing up an agreement with the lender that doesn’t expire, and usually, this mortgage lien lasts for 15 to 30 years. For a lender, this is trapped money they can not use until this period is over. For this reason, most lenders transfer or sell loans to other companies, usually called investors, so they can free up the funds immediately and can again lend them to other clients. These investors are usually government-owned or sponsored companies called Fannie Mae, Freddie Mac, and Ginnie Mae, but there are numerous nongovernmental investors that make the purchases. Here is how this works.

The lender can sell the whole loan.	In this scenario, the lender is selling the whole loan with servicing rights to another company.
The lender can sell servicing rights.	A lender can keep the loan in its possession but sell servicing rights to another company.
Investors purchase the mortgage loan.	Investors can purchase a group of loans as a bond.
The servicer sells their rights to another company.	The servicer of your loan can sell this service to another company.

What Happens When Your Mortgage Is Sold?

No matter if you had a mortgage broker to help you with your application or maybe a mortgage packager – once your loan is sold to another company, you would be obliged to make the next payments to them. You probably wonder how this is possible if you haven’t signed any agreement with that company. Well, in fact, consumer consent is not required in order for financial institutions to sell mortgages or transfer them to another company. This is backed up by federal banking laws, and this, by any means, should not affect any terms and conditions of your loan. Also, this change will not affect your credit score. There are two ways your loan can be changed – you have a new servicer or a new lender.

What to Expect if You Have a New Servicer?

Even though there will be no changes in your loan agreement, there will be some changes you can expect. If your lender sells servicing rights for your mortgage loan, this means you will have to make payments to another company. You should expect to receive two letters – one will be from your current servicer, and the other one will come from the future one. This letter from your old servicer must come in a 15 days period prior to your next payment. Here is what your servicing transfer note must include:

Name and address of new servicer.
When the current servicers will stop accepting payments.
When will the new servicer begin to accept your payments.

The exact date when you need to pay your next payment to a new servicer.
Statement that transfer will not affect terms and conditions.
If you have life insurance or regular insurance connected to your mortgage, what are the next steps you need to take?

What to Expect if You Have a New Lender?

Even though it can happen that your loan is sold multiple times to another lender if your servicer is not changed, you probably would not even know this happened. However, if your lender is changed together with your servicer, you should expect to receive notice from your new lender as well. Here is what this notice must have:

The name, address, and telephone number of the new loan owner.
The date when the new owner takes possession of the loan.

Where the transfer of ownership is recorded.

Other Things to Watch Out For

Another thing you need to know if anything changes in your loan is to make sure you put down the correct payment information about your new lender or servicer. Also, if you have recurring mortgage payments or automatic payments, you need to cancel them and set up a new one. Keep in mind that this process can sometimes last for a couple of days, so make sure you cancel these payments on time. Also, you should never send payments until you receive a transfer or sale notice.

Mortgage One Will Sell Servicing Rights for Your Loan

Mortgage One Inc is a lender based in California that provides fixed and adjustable rate loans, VA, FHA, and Jumbo loans. Once you are approved for a mortgage and you sign the closing, their servicer company will continue to receive the monthly payments from you. It can happen that servicing rights are sold to other companies.

What to Do When Searching for a New Lender?

When applying for a mortgage, you will receive a servicing disclosure statement. Here a lender must clearly state if he has any intentions of selling the servicing rights to another company or not. As we already mentioned, selling the loan or transferring it to another lender is usually done without notice to the borrower, so the only notice you will receive is if your servicer changes together with your lender. If this is not good for you, you can always find another lender that will state that there will be no changes. That will be a rare thing to find, but yet not impossible.