Frequently Asked Questions

Is my loan going to get sold?
Assume that your loan will be sold. The good thing about this is that the marketability of pools of loans as "Mortgage Backed Securities" has led to lower rates for borrowers. The annoying thing is that your loan may get sold a couple of times in the first year and you have to keep track of whom you have to pay. While this can be an inconvenience, particularly if they are in another state and time zone, we feel it is one of those inconveniences that we all put up with for the sake of lower rates.

As part of the loan documents you will be asked to sign, a form granting recognition to the fact that your loan may be sold will be included. You will also be provided with a form from the lender indicating what percentage of their loans have been resold in recent years.

However, it is important to know that there is a Federal regulation which gives you the ability to make payments to your old lender for a period of time after your loan is sold. This will protect you from having your payment reported as "late" if you send it to the old lender soon after it is sold. Protect your rights in this regard.

What if my lender goes out of business?
People sometime ask: "If the lender you find for me goes out of business or becomes insolvent can I be forced to pay my loan off early?". The answer is "No, never"

If the ownership of your loan is transferred because of failure it is still governed by the original note and deed of trust. Your note cannot be accelerated and your rate cannot be modified as a result of the failure. (Ironically, this is not true of the savings or CD account you might have with a failed institution. There the principle may be guaranteed but the interest isn't!)