Why was my mortgage sold to another company, and what are my rights with the new servicer?
The short answer
It's normal: lenders often sell loans or transfer who collects payments, and it doesn't change your rate, balance, or terms. You should get written notice from both the old and new companies, and for 60 days after the switch you can't be charged a late fee if you accidentally pay the old one on time. The Mortgage Advisory tells clients upfront who will service their loan when we know.
Why do loans get sold?
Lenders sell loans, or the right to service them, to free up money to make more loans. It's routine and doesn't mean anything is wrong with your loan. The servicer is simply the company that collects your payment and manages your escrow.
What stays the same?
- Your interest rate and loan terms
- Your balance and payoff schedule
- Your escrow arrangement for taxes and insurance
What notice should I get?
- A goodbye letter from your old servicer, generally at least 15 days before the switch
- A welcome letter from the new servicer, generally within 15 days after
- Both should give the effective date, the new payment address, and a phone number for questions
What protections do I have?
- 60-day grace period: if you send an on-time payment to the old servicer by mistake during the first 60 days, you can't be charged a late fee for it.
- Escrow must keep paying your taxes and insurance on time.
- You can ask questions or dispute errors in writing, and the servicer has to respond.
What should I do?
- Verify the letters are real by calling the phone number on your old servicer's statement, not the number on the new letter. Scammers copy these letters.
- Update autopay with the new servicer.
- Keep your last statement from the old servicer showing your balance and escrow.
- Check your first new statement carefully.
Example scenario (illustrative)
A homeowner in Arvada gets a letter saying her loan is moving to a new servicer next month. She confirms it by calling her current servicer, sets up autopay with the new one, and checks that her escrow balance carried over. Her rate and payment don't change.
Our take
A servicing transfer is annoying but harmless. Just verify it's real, move your autopay, and keep good records. If anything looks off, send it to me and I'll help you sort it out.
Ace Ausar, Mortgage Banker · NMLS #1143018
The Mortgage Advisory, Inc. · NMLS #1549739
Reviewed by Ace Ausar, NMLS #1143018 · Updated
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