My daughter recently got her first house and mortgage to go with it. She did business with Rocket Mortgage and had a good experience with them. Then of course inevitably her mortgage got sold to another company, so she now has to deal with them when she wanted to stick with the Rocket Mortgage site.
15 years ago I got my mortgage with Century 21 Mortgage (which I believe was just another name for an actual lender), then of course it got sold 5 or 6 times over the years. Most recent changes were to Mr. Cooper, then Mr. Cooper again (they told me they were changing from Mr. Cooper to Mr. Cooper, I never figured that out).
Now ironically after my daughter’s mortgage was involuntarily switched away from Rocket Mortgage, I have been informed my mortgage is changing to Rocket Mortgage.
I can only hope all the rich guys get a little richer from this.
Yes the terms are surprisingly very set in stone from one company to another. I’m sure there are laws, but you’d think companies would have figured out ways around them.
But how and where you pay has changed in my experience. I’ve had to create logins for new websites and had a few payment issues along the way. I’ve read some horror stories of new involuntary mortgage companies not properly paying the escrow on a property.
Nationstar changed its name to Mr. Cooper the day after it released its worst ever financial report and then changed it again to Mr. Cooper Group after it merged with another company.
The mortgage holds but the mortgage probably says that the lender is “Rocket Mortgage, its successors and/or assigns as their interests may appear”, meaning the lender can change if Rocket sells it.
The other thing is, there’s two things that can be sold here, the mortgage itself and the servicing rights. The servicer is who you’re actually paying, but may not necessarily be who “owns” the mortgage. So you can have another company service a mortgage you own or even sell the mortgage while retaining servicing rights yourself.
This is the biggest reason I have stuck with my credit union for all of my mortgages over the last two decades, including any refinanced mortgages: they don’t ever sell their mortgages. So I know who I’m dealing with, who holds my mortgage, and who to make payments to.
I don’t want to be in a situation where I am forced to do business with an entity that I have no say in—especially when this is for my largest asset (and largest debt).
As I recall, my loan documents indicated what percentage of mortgages were sold in the previous year by my credit union before I signed the loan—and I was very pleased to see that the answer was “zero.” So it’s not necessarily inevitable that a mortgage will be sold.
I haven’t given up much either by staying with my credit union. They’ve always had competitive rates. While I might have saved a small fraction of a percentage point in the loan rate here or there, any purported savings are just not worth the hassle for me.
I’ve lost track of how many mortgage companies we’ve been with. At least I get notified with sufficient time to get the auto-pay accounts in order and notify my insurance company. The property tax info gets transferred automatically, and maybe insurance does, too - it’s been a while since the last shuffle. All I know is last time I did a refi, I got a rate under 3%. As long as that doesn’t change, I don’t care who I send the money to.
This. I had my mortgage and servicing rights sold several times. Early on, each would go with the same company as the other. But then they started being sold separately. It was frequently a confusing mess. It’s tiring, how every goddam little thing has to be monetized to death.
I don’t understand what “servicing” a mortgage means. My only interaction with the company was to send them the payment every month and, when the mortgage was paid off, get back the note and all the property deeds going back to when the house was built.
I refinanced five years ago or so and it was with Mr. Cooper just after their rebrand. Mr. Cooper was supposed to be this folksy customer service thing where you always got through to customer service and they were chatty and friendly. And they were. I did the thing where you didn’t have to pay your mortgage during covid with no hit to your credit and no accrued interest. I talked to agent throughout that and the refinance at the end that got me a 3.25% 40-year fixed loan. It was awesome. Once that business was over they fired most of the staff and it’s back to phone trees and not being able to talk to a real person.
At the beginning I got moved to Rushmore and it was totally painless and transparent.
I’m sorry but every time I read your thread title I want to know the steps to the Ironic Mortgage Shuffle. I can hear faint music in the back ground… maybe a commercial jingle.
A loan servicing company specializes in accepting payments from consumers, having a customer-facing website, dealing with customer service problems, chasing delinquents, etc. They do all the retail work.
The other half of a mortgage is who actually owns the debt and ultimately receives the repayments. Those are generally wholesale financial outfits They may in fact have bundled thousands of mortgages together then sold commercial bonds backed by the whole blob. Those are pure money guys doing money stuff in their money world. The do not care about real estate and especially they want nothing to do with individual consumers.
From the borrower’s POV, the servicer is the only entity you know or care about. And as noted above, your servicer can be changed several times over the life of your loan as all these businesses buy and sell stuff seemingly mostly for the fun of it.
I think this is a difference between Canada and US banking. The mortgages I’ve had have been with a specific bank. Like @Hari_Seldon, I’ve never heard of a loan servicing company. All my dealings were with the bank that held my mortgage.
That’s generally broadly true, and all my mortgages have always been with a major bank, but Canada does have a very large number of non-bank mortgage lenders, and, although it’s not common, there’s the occasional separate mortgage servicing company like Institutional Mortgage Servicing. I think the main difference in Canada is the way that all financial institutions are tightly regulated at the federal level. I’m not a financial expert but I think there are a whole bunch of reasons rooted in this regulation that the kind of unethical shenanigans that precipitated the subprime mortgage crisis in the US did not and could not happen here.
Not all finanical institutions are regulated federally. The federally chartered banks are, but other financial institutions such as credit unions and trust companies are regulated provincially.
The federal government has exclusive jurisdiction over “Banking, Incorporation of Banks, and the Issue of Paper Money”, which one Canadian constitutional scholar described as something that Alexander Hamilton could only dream about for the US federal government.
Our federal regulator is very conservative in the fiscal / avoidance of risk sense, so our banks are heavily regulated; which as you say, stood us in good stead in 2007.
The last time a federally regulated bank failed in Canada was in the early 1980s.