Why do mortgage companies transfer or sale mortgages?
Just wondering. Have never been late on a payment and just was wondering. When I called old mortgage company and new, they both say that this is just standard practice….
Tags: Companies, Mortgage, Mortgages, sale, Transfer
That’s it — standard practice.
Your current company sells off a block of “less than desirable” mortgages to them, that another company finds no problem with.
It has nothing to do with you
It’s all about cash flow. They sell paper to other financial institutions for cash.
Because the investors get a good rate of return with a low risk investment. People don’t usually default on their homes.
It has nothing to do with you. It is standard practice. It’s how they make money faster.
Yep, just a standard practice. They gather a bunch of mortgages they hold and package them together to sell to another mortgage house, usually at a discounted rate. Doesn’t have anything to do with your credit history or payments.
They make money by doing this.It has nothing to do with you whatsoever and it is common practice these days.
They sell them to other lenders who in turn bundle a bunch together and sell the entire portfolio of loans on Wall Street, that way they have more money to keep making loans
it’s just standard practice. but the truth is that some mortgage companys what or need more mortgages, and it’s easier to buy them,
They are right in that it is standard practice. There are generally lenders that acquire mortgages and there are lenders that service mortgages. The acquisition company is the company you close with; the company you may make your first payment to. They receive the underwriting and closing costs, but do not want the hassle of servicing the loan. They then sell it to a lender that services loans. That company will service the loan and collect the interest and any applicabe charges (such as late fees, etc).
All of this is done based on the companies abilities and desires; some companies acquire and not service, some don’t acquire but service.
mortgage bankers are always buying and selling. they buy what they think is a great rate but when rates change they unload some to freddie mac and others to get cash to buy better deals. around and around they go. wierd huh? that is capitalism 101. unless you have an adjustable mortage, you pay the same etc. each month. not affected. god knows if you have a nonstandard longterm loan these days. reminds me of musical chairs. Peace and bless you dear. (appreciate yor vote, thank you.)
Sometimes they get too many on the books, so this is a way to maintain a certain number of mortgages. Also, some finance companies are in the business to make a quick profit, meaning they are willing to settle for a small profit on the now and not the large profit that will take 20 years to collect. The more they can sell, the more they make by volume. I hope this helps you.–Everyone that is answering this question is right on target.
It is standard business practice for some lenders. They make their money from origination fees and not from holding the loan while it pays interest. They do not want to tie up capital. They want to focus on the marketing and sales of new loans and let other investors hold the loan to collect the interest.
Very standard process.