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Mortgage  Question?
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Mortgage sold and new lender not honoring interest rate

My mortgage was sold and the new lender is not honoring the interest rate on my mortgage statement. Is this legal?

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

The terms of your mortgage, including your interest rate, are determined by your mortgage note, not your mortgage statement. A mortgage note is the legal document between you and the bank that provided your mortgage that outlines the terms of your mortgage including your interest rate and if your rate is subject to change, loan length and other key loan terms. We provide an example mortgage note on FREEandCLEAR for you to review.

Banks frequently sell mortgages to other banks or loan servicing companies but selling or transferring your loan does not change the terms of your mortgage or your mortgage note. When your mortgage is transferred from one company to another the new company is legally obligated to honor the loan terms outlined in your mortgage note. For example, in your case, your new lender is legally required to uphold the terms of the mortgage note you signed with your original lender and the mortgage note does not change because your loan was transferred from one lender to another.

Without having all the information it is unclear to me if the interest rate on your mortgage statement is different than the interest rate outlined on your mortgage note, or why this would be the case. If you feel like your new lender is acting in bad faith or violating the terms of the mortgage note then you should contact the Consumer Finance Protection Bureau (CFPB), your local housing commission or a real estate attorney. The the Consumer Finance Protection Bureau (CFPB) is a government agency that may be able to offer free advice and your local housing commission is a not-for profit organization that may be able to offer additional assistance.  If the CFPB or the housing commission cannot address your concerns then you may want to contact a real estate attorney to review the issue.

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About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry

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