Most people are under the assumption that a loan has to be in delinquent status in order to be transferred. The truth is that any loan can be transferred at any time the bank wishes. Remember the fine print that you speed read through at the closing?
Somewhere in that fine print, it states that your mortgage company reserves the right to sell or transfer your loan at any time they wish after the closing. That means that the lender has the right to sell your loan to another lending institution without your permission.
Usually, mortgage companies will give you a written notice in the mail informing you that your loan has been or will be transferred to the new lender or servicing company.
However, I’ve had many clients tell me that they were made aware of the transfer only through a welcome letter from the new lender. Sometimes loans get transferred multiple times. Just because your loan was transferred once, it doesn’t mean that it won’t get transferred again…and again, etc.
Unless you pay off your loan in full, you will never have control over who controls your mortgage.
Mortgage Transfers Are Especially Challenging for Short Sale Realtors
For real estate agents like myself that specialize in doing Orlando short sales, this can be an extremely frustrating situation. You can have hours, days, weeks, and even months invested in a short sale file then… WHAMMO!! Out of the blue the loan gets transferred to another lender. It wouldn’t be such a big deal if they would just transfer the complete file over to the next lender so that we could just pick up where we left off. But that’s not the case……that’s never the case!
The new lender requires the agent to submit the entire short sale package again from scratch. The only thing that does transfer over it seems is the pending sale date. So not only are you forced to waste a lot more time submitting the new file, getting a hold of the negotiator, etc. but the sale date doesn’t usually get delayed.
This has happened so many times to me that you wouldn’t bother me any more right? Wrong… this has to be the most frustrating thing that can happen to a short sale realtor especially if you’ve been working the file for several months. However, sometimes it’s a blessing in disguise if you’re lucky enough to get a lender that’s more flexible with their terms or guidelines other times homeowners end up with a lender with a much stricter set of rules.
