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Updated over 3 years ago, 05/17/2021
Question about banks who sell their mortgages
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.
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.
@Jhanel Wilson thank you!
All conventional, fha, and va loans will get sold multiple times.
- Russell Brazil
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- (301) 893-4635
- Podcast Guest on Show #192
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.
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.
@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.
@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.
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.
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.
Thank you both!