Why did my bank sell my mortgage?

Your lender may sell your mortgage to another financial institution after you close. It's actually not uncommon for a loan to be sold more than once.

If your mortgage is sold, your rate, terms and payment plan will all remain the same. You'll just have to update your details with the new mortgage company, which may involve setting up a new autopay system or bookmarking a new web portal.

The lender that approves your application, underwrites the loan and closes on the house is known as the mortgage originator. The entity that handles everything after that — from collecting payments to fielding requests for loan forbearance or modification — is your mortgage servicer.

Sometimes, the originator and servicer are one and the same. In many cases, though, originators sell off mortgages to third parties.

There are even companies, like Mr. Cooper, that specialize in mortgage servicing.

Lenders typically sell mortgages to clear your debt from their records and have capital to originate more loans.

Rather than waiting years for you to pay off your loan, they'll bundle it with others and sell it as part of a mortgage-backed security on the $7.7 trillion secondary mortgage market.

According to federal law, your original lender must notify you at least 15 days before the handover to a new company for servicing. After that, the new servicer has 30 days to provide its name, address and phone number.

Within that first month, you should: 

1. Learn about your new servicer

Find out who to contact with questions or complaints. Review the new provider's record in J.D. Power's annual mortgage servicing survey. Make sure communication is arranged in a manner that suits, whether that's by phone, mail or email.

2. Set up your new payment system

If you autopay, load your bank account and routing numbers into the new servicer's website. If payment is made electronically, make sure your bank has the correct address and other details. And, obviously, if you submit checks in the mail, find out the new payee's address information. 

There is a 60-day grace period, during which you won't be hit with late fees if you send payments to the old servicer and your new servicer won't report payments as late to a credit bureau. Do your best to not rely on that safety net, however.

3. Adjust home insurance and other policies

If you are still paying private mortgage insurance, you'll need to confirm your policy covers your new servicer. You may have to let your homeowners insurance company know, as well.  

No traditional lenders will promise to never sell your mortgage, but your odds are better with some institutions.

Regional banks

Because they rely on close customer relationships, regional banks are less likely to sell mortgages. Fifth Third and Huntington Bank are both based in Ohio but lend in more than a dozen states. While they do sell some loans on the secondary market, they retain servicing rights for many, so you stand a good chance of the same team handling the day-to-day management of your mortgage.

Credit unions

It's less common for credit unions to resell mortgages because they're member-owned and reinvest profits into the company. Two of the nation's largest, FourLeaf Federal and Navy Federal Credit Union, rank highly for customer satisfaction on J.D. Power's mortgage servicing survey.

Nonbank lenders

While traditional banks worry about balancing their mortgage business with deposit accounts, credit cards and investments, nonbank lenders can focus on home loans.

Two of the largest, Pennymac and Guild Mortgage, pride themselves on servicing a majority of the loans they originate. According to Guild's marketing, "We're your loan partner throughout the life of the loan."

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of mortgage products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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