Mortgage banks are state-chartered temporary lenders who must sell the loans they originate because they do not have the long-term funding needed to hold them permanently. While mortgage banks always sell the mortgages they originate, they may retain the servicing under contract with the buyer.
Mortgage servicers earn fees for servicing your account and from time to time mortgage servicers may decide to sell the rights to service your mortgage to another company. Your consent is not required for the sale of your mortgage and your loan may be sold multiple times.
Why loans are sold. Many consumers don’t realize there’s a thriving market for loans, referred to as the secondary market. When you borrow from a bank or credit union, you may not notice that.
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There are basically two main reasons why a lender might sell your mortgage. The first has to do with capital. When a loan gets sold, the lender has basically sold servicing rights to the loan, which clears up credit lines and enables the lender to lend money to the other borrowers.
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While lenders tend to hold high-balance loans in their portfolio, they usually sell most mortgages because that’s the easiest way a lender can generate cash to make new mortgages. Without the secondary mortgage market, lenders wouldn’t be able to originate as many mortgages as they do.
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However, what most borrowers don’t realize is that there is a good chance their mortgage will be sold at some point down the road anyway – even by the corner bank. Why do lenders sell mortgages? Lenders sell mortgages for two main reasons: Make money off of the loan. Lenders make a commission off the mortgages they sell.
“Once you get above probably. probably don’t want to do is sell stocks or bonds and create yet another tax liability by selling so you can pay your taxes this year,” Blum said. Ultra-wealthy.
When a loan gets sold, the lender has basically sold servicing rights to the loan, which clears up credit lines and enables the lender to lend money to the other borrowers.
WASHINGTON (MarketWatch) – Question: I recently came across an old article you wrote about what to do if your mortgage is sold to another lender. In it, you wrote, "If you just get the one.