What is an Assignment of Mortgage?

Most mortgages are sold at least once during the life of the loan. A mortgage company or your local bank will sell the loan to free up their cash and then lend out more money other home buyers. When the mortgage is sold of it is called an assignment. The party that bought the mortgage is now responsible for dealing with you the customer to make sure that all payments are made for the next 15, 20 or 30 years.

An assignment of a mortgage is a bank to bank, or entity to entity transaction. Your bank does not need your permission and does not have to notify you that your loan has been sold. Instead, it is up to the new party that has bought your loan to send out a notification. This notification will let you know to whom you will be making your monthly payments, contact numbers and addresses for customer service issues and any other important information that you will need.

In general, nothing else about your mortgage will change. The monthly payment amount and interest rate should stay the same. However, if you do want to make some changes then you can try to negotiate with this new company. They can accommodate you, at their discretion.

Once you get your notification, you should immediately contact your old loan company and verify that they have indeed sold you loan off to another company. Due to the rapid increase in identity theft scams all over the country, you should always call and verify any type of notice from a company that you do not recognize. Contact your old mortgage company ask them to verify that they have sold the loan, the name of the company that bought your loan and their contact information. Then you can verify this information against the letter that you have received.

It is not uncommon for the loan to be sold more than once. A large portion of all consumer mortgages are assigned to Fannie Mae, Ginnie Mae or Freddie Mac.