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What happens when your mortgage is sold to new lender?

What happens when your mortgage is sold to a new lender? Can the new lender increase your monthly payment or change your loan terms?

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

In short, when you mortgage is sold from one lender to another it does not change the terms of your loan or your monthly payment. You may make your payment out to a new mortgage servicer -- the company that collects your payment and manages your loan -- but your mortgage terms including your payment, interest rate and loan length remain unchanged. Additionally, the new lender or servicer is your point of contact if you have any questions about your loan.

Your new lender cannot charge you a higher mortgage rate or impose fees penalties that are not permitted according to your original mortgage note. Your mortgage can be sold or transferred multiple times over the course of your loan but the terms outlined in your mortgage note remain intact unless both you and the lender agree to modify them. A lender cannot unilaterally change the terms of a mortgage without the written consent of the borrower.

Please note that any outstanding late fees, penalties or past-due payments on your account are transferred to the new lender when your mortgage is sold but your new lender cannot impose any additional fees or penalties unless they are stipulated in your mortgage note.

If you notice any differences in your monthly payment or statement after your loan is sold to a new lender then I recommend that you review your mortgage note to understand why the changes occurred. If you cannot determine the cause of the changes and you think the lender is not abiding by the terms of your original mortgage note then contact the lender and ask for an explanation.

If you cannot resolve the situation by speaking with your new lender then you should contact your state attorney general or the Consumer Financial Protection Bureau to look into the matter more closely.

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About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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