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Updated over 3 years ago, 05/17/2021

User Stats

76
Posts
16
Votes
Justin Schaefer
  • Real Estate Investor
  • Mukwonago, WI
16
Votes |
76
Posts

Question about banks who sell their mortgages

Justin Schaefer
  • Real Estate Investor
  • Mukwonago, WI
Posted

Hello, I'm a newbie looking to do my first house hack. I am currently shopping for lenders and have encountered some who admit up front that they would for sure sell my mortgage if I got one through them. From everything I've read it doesn't sound like this is a big deal, but when I talk to other investors and even my own realtor, they usually seem to dislike this, but I'm not really sure why. Could I get the thoughts of others on this please? What do I need to know? Thanks in advance.

User Stats

63
Posts
58
Votes
Jhanel Wilson
  • Rental Property Investor
  • Philadelphia, PA
58
Votes |
63
Posts
Jhanel Wilson
  • Rental Property Investor
  • Philadelphia, PA
Replied

I have only encountered a small inconvenience when trying to set up my automatic payments. Sometimes don’t know where to send the Money.

But most of my commercial mortgages are with local credit unions, they keep and service their own loans.

User Stats

76
Posts
16
Votes
Justin Schaefer
  • Real Estate Investor
  • Mukwonago, WI
16
Votes |
76
Posts
Justin Schaefer
  • Real Estate Investor
  • Mukwonago, WI
Replied

@Jhanel Wilson thank you!

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User Stats

17,331
Posts
29,870
Votes
Russell Brazil
Agent
  • Real Estate Agent
  • Washington, D.C.
29,870
Votes |
17,331
Posts
Russell Brazil
Agent
  • Real Estate Agent
  • Washington, D.C.
ModeratorReplied

All conventional, fha, and va loans will get sold multiple times. 

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District Invest Group
5.0 stars
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User Stats

5,409
Posts
2,572
Votes
David M.
  • Morris County, NJ
2,572
Votes |
5,409
Posts
David M.
  • Morris County, NJ
Replied

@Justin Schaefer

Not to be mean, but with that much real estate investing history and studying in your profile, you don't know about the secondary mortgage market?  Fannie Mae?  Freddie Mac?  The Federal Govt provides the liquidity to the residential lending industry via these quasi gov't organizations buying "conforming loans?"  If you started studying since the change in the millenium, the last major depression was a mortgage crisis literally derived from this.

One "catch" that people don't understand is the difference between who owns the Note/loan and who does the servicing.  Some organization, such as larger banks (I think) will still service the loan, i.e. collect the payments, be the 800 service for when you call in, etc.  But, they will have already resold the Note to obtain the liquidity.

in my opinion, those investors and realtors are probably not worth talking to if they are worried about the loan being resold.  However, I would be more careful about the servicer.

Keep studying.  Good luck.

Account Closed
  • Investor
  • Singapore
3,225
Votes |
1,581
Posts
Account Closed
  • Investor
  • Singapore
Replied

I think I am on my 5th bank now. Not as much mortgages being sold as much as banks being bought by even bigger banks! Annoying to re set up payments etc but luckily the guy who helped me get the original loans has remained employed through it all and has helped me navigate awful customer service departments, which just gets worse each time.

User Stats

76
Posts
16
Votes
Justin Schaefer
  • Real Estate Investor
  • Mukwonago, WI
16
Votes |
76
Posts
Justin Schaefer
  • Real Estate Investor
  • Mukwonago, WI
Replied

@Anish Tolia

Thank you. So in other words, paying them has been the only complication you've experienced from the loans being sold? This is what I've gathered from talking to others, just wanting to hear about others experiences to see if there's anything else I'm not already aware of.

User Stats

76
Posts
16
Votes
Justin Schaefer
  • Real Estate Investor
  • Mukwonago, WI
16
Votes |
76
Posts
Justin Schaefer
  • Real Estate Investor
  • Mukwonago, WI
Replied

@David M.

Thank you, but that wasn't what I was asking. I do understand all of that. I was merely wanting to know if there's anything that could happen with the sale of those notes for which I was not already aware. Sorry if I wasn't clear enough in my question.

Account Closed
  • Investor
  • Singapore
3,225
Votes |
1,581
Posts
Account Closed
  • Investor
  • Singapore
Replied
Originally posted by @Justin Schaefer:

@Anish Tolia

Thank you. So in other words, paying them has been the only complication you've experienced from the loans being sold? This is what I've gathered from talking to others, just wanting to hear about others experiences to see if there's anything else I'm not already aware of.

That and insurance issues. For whatever reasons banks have a really hard time updating insurance every year. Even when I proactively send them the renewals.  

User Stats

5,409
Posts
2,572
Votes
David M.
  • Morris County, NJ
2,572
Votes |
5,409
Posts
David M.
  • Morris County, NJ
Replied

@Justin Schaefer

Then it sounds like your question is really about the servicer, NOT the holder of the Note.  Yes, it can be all about the service.  many years ago, one servicer I had only had phone hours 9-6.  So, it was difficult to get a hold of them when I was working a salary job.  Also, with multiple loans, you have to deal with multiple servicers.  For example, if you use mutliple/different lenders, then you'll have to work with different servicers most likely to manage your loans (if have any reason to call them) instead of all in one place.  

But again, this has nothing to do with who holds the Note. Good luck.

User Stats

76
Posts
16
Votes
Justin Schaefer
  • Real Estate Investor
  • Mukwonago, WI
16
Votes |
76
Posts
Justin Schaefer
  • Real Estate Investor
  • Mukwonago, WI
Replied

Thank you both!