Buyers & Sellers: Who Owns Your Mortgage?

TRULIA'S BLOG \ MONEY MATTERS

How to Protect Yourself When Your Mortgage Is Sold

By Andrea Murad | September 30, 2015

If your loan was sold to a new lender or servicer, that’s not necessarily a bad thing.

                  

Although you may have signed on with a certain lender when you bought your house, you may find that after a while, your mortgage statements start coming from a new company. While it can be unnerving to see this new name asking for payment, fear not! The practice of selling mortgages in the secondary mortgage market is very common.

In fact, the majority of mortgages are sold in the secondary market after they’re originated. Regardless of which company owns your loan, a loan is a loan — and what’s on your mortgage note hasn’t changed.

But just so you can rest easy, here are answers to common questions you may have about your mortgage changing hands.

Why would a lender sell my mortgage?

The adage that “it takes money to make money” holds true, especially for lenders. Lenders need capital to originate new mortgages, and most mortgages have 30-year terms. If a company were to wait for borrowers to pay off their loans, it would need an exorbitant amount of capital to fund new mortgages. So instead of waiting 20 to 30 years for a borrower to pay down a mortgage, most lenders sell the loans they originate to an investor, such as a government-sponsored enterprise (for example, Fannie Mae or Freddie Mac).

Home mortgages aside, banks and finance companies sell just about every loan they originate so they can raise money to make more loans. Auto loans, credit card loans, and student loans are all fair game to package into bonds that can be sold to both domestic and international investors. Without investors willing to buy these loans, banks and finance companies wouldn’t be able to lend you money from the get-go.

Is it legal for a lender to sell my loan?

Yes, it’s perfectly legal for a lender to perform a mortgage transfer, but not every lender sells every loan. Some lenders hold higher-balance nonconforming loans on their balance sheets; sometimes these same loans are sold to investors so that the lender can free up cash and originate more loans. It really depends, and borrowers cannot stipulate that their mortgage won’t be sold to another lender or that the servicer won’t ever change.

The Real Estate Settlement Procedures Act requires that a lender disclose plans to transfer servicing for your loan to another lender in the Mortgage Servicing Disclosure Statement. If you didn’t receive this document when you applied for your loan, your lender should have mailed it to you within three business days of your application.

How do I find out if my loan has been sold?

Lenders are required to notify borrowers within 30 days of the sale. This notice will include the name and contact information for the new owner of your loan, when your loan will be sold, and whether the sale will be included in public records.

Is the servicing sold too? Are the servicer and lender the same company?

Your lender and the servicer aren’t always the same company. A lender originates the loan and provides the capital for you to buy your new home or refinance your existing home, while the servicer handles the day-to-day maintenance of your loan — things such as processing and recalculating payments, managing escrow accounts, and beginning foreclosure proceedings.

Sometimes the servicer will remain the same after a loan is sold. If the servicer changes, you’ll receive notice of the new servicer that includes details on where to send payments and contact information for questions.

Will my payment change if my loan is sold?

Unless you have an adjustable-rate mortgage, no. Whether your loan rate is fixed or adjustable, your payment may also change if you pay your taxes and insurance through an escrow account and what’s due changes. All other loan terms will remain the same.

What if I send my payment to the wrong lender?

If your payment is already in the mail, you won’t be charged a late fee for mailing your check to your old lender. There’s a 60-day grace period after your mortgage is transferred.

What if I don’t receive any notices, and my servicer has changed?

For borrowers, the transition between lenders and servicers is usually pretty seamless, but that’s not to say mistakes don’t happen. When thousands of loans are transferred from one company to another, issues can arise. If your lender or servicer changed and you weren’t notified, then you can file a complaint online with the Consumer Financial Protection Bureau.

Borrowers should feel confident that they are protected if their loan is sold in the secondary mortgage market. The handoff to a new lender or servicer should be as painless as receiving a few letters in the mail, and being cognizant of where and when to send your payment each month.

- See more at: http://www.trulia.com/blog/how-to-protect-yourself-in-a-mortgage-transfer/?ecampaign=cnews&eurl=www.trulia.com%2Fblog%2Fhow-to-protect-yourself-in-a-mortgage-transfer%2F#sthash.tqmawez4.dpuf

Sellers: 5 Reasons You Should Not 'For Sale By Owner'

Thinking of Selling? 5 Reasons You Shouldn’t For Sale By Owner

by The KCM Crew on September 28, 2015

 
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In today's market, with homes selling quickly and prices rising some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.

Here are five reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies, which work for the buyer and will almost always find some problems with the house.
• The appraiser if there is a question of value

 2. Exposure to Prospective Purchasers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where do buyers find the home they actually purchased?

• 43% on the internet
• 9% from a yard sign
• 1% from newspaper

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $208,000 while the typical house sold by an agent sells for $235,000. This doesn’t mean that an agent can get $27,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

Why use a Realtor when selling your home?

7 Reasons to Use a REALTOR® When Selling Your Home

Long & Foster OC

10 Best Secrets for Selling Your Home

                                                   

RISMEDIA, Saturday, September 26, 2015— Selling your home can seem a daunting task. When you close that deal, you want to make sure that your home goes to the best buyer for the best price. It may seem cheaper to sell your home yourself, and many do; however, there are a lot of details to work through.

“Selling your home through a REALTOR® can help you make sure you get the best value overall,” says Kimberly Nicole, a REALTOR® based in The Woodlands/Houston, Texas metro area who caters to luxury homes and their clientele.

Nicole offers seven reasons why you should use a REALTOR® instead of selling your home yourself:

1. REALTORS® Know How to Navigate the Process – A REALTOR® is the manager of your home buying process. Nicole explains that you and your REALTOR® will begin with extensive discussions to head off any road blocks later on. Your REALTOR® is aware of your concerns, needs and priorities. They are there from the beginning to end, navigating each step of the way with you. Selling real estate can be a tricky business, full of regulations and involved steps. Your REALTOR® works for you, staying on top of the latest regulations and helping you meet them.

2. REALTORS® Know How to Professionally List the Property – In the age of Web 2.0, it’s not enough to upload your phone photos to a few random sites. Buyers expect professional photos, videos and flawless online presentation. To get the most exposure, you also need to manage your listing across multiple channels. REALTORS® will do all this for you, including coordinating with photographers and videographers to make sure your listing is top-notch. “Hitting the right emotional and responsive chords with buyers is the goal,” says Nicole. “Determine who the likely audience is, and market directly to that audience.”

3. REALTORS® Know How to Prepare Sellers – Before you sell, your home must be in the best condition possible. Your REALTOR® can advise you on what repairs need to be done, and they frequently know good contractors. You may have to have inspections done before you sell, and will probably have to do repairs. A REALTOR® can set up any required inspections and instruct you on how to prepare. Sometimes homeowners will take out a loan against the house to finance costly repairs, but this can’t be done while the house is on the market. A REALTOR® may help assess the situation, and then wait to list it until the repairs are completed.

4. REALTORS® Can Help Sellers Prepare for Showings – “Staging is extremely important,” says Nicole. “That first impression is vital.” Not only do all of the repairs need to be done, but if you still live there, the place must be kept clean and staged. This means everything from maintaining curbside appeal to the little details, like placing out a plate of cookies or laying out your best dishes in a table setting. She advises that a home must be open and inviting, and that smells, pets and lighting must all be taken into consideration. “We don’t want a home not selling because a buyer can’t see their own furniture in the home.” Your REALTOR® may also advise you to de-clutter certain closets and rearrange rooms. They may explain which personal touches add a “homey” look and which things detract from a potential buyer envisioning their own decor.

5. REALTORS® Can Help Get Buyers Through the Doors – REALTORS® not only get the traffic in, they know how to manage it. They can arrange and hold open houses in a way that gets as many visitors as possible. They also work with buyers so that showings are more convenient for you. This is especially important if you still live in the house. REALTORS® may also help weed through potential candidates so that you don’t waste your time with no-shows or non-serious buyers. “If a person needs to sell a house before buying another, the seller needs to know this,” says Nicole. This all factors in to final decisions and net proceeds.

6. REALTORS® Know How to Objectively Negotiate – You may think preparing and showing your home may be stressful, but receiving offers can be difficult. “The goal is to get the most money as the seller, and as the buyer the goal is to look at market value and if it’s priced appropriately. You don’t want to present an offer that’s an insult to the seller," says Nicole. A REALTOR® can help you stay reasonable, without letting you take a lowball offer either. They will also be there to navigate a multi-bid and renegotiations. “Renegotiations fall apart all the time, and deals frequently don’t come through,” she says. “Each side has different concerns, and each party needs to know where the other stands.” Closing can be a confusing process, and there is a lot of paperwork to sign. Your REALTOR® has been through this many times and can explain everything you are signing and why. If you have any questions on anything, your REALTOR® is right there.

7. REALTORS® Know the Area – “The key to a good agent is knowing the area,” says Nicole. They know what the property values are, and have a good idea of future market fluctuations. They also know where and how to list your property for best results. Having a home listed on MLS is not enough. A good REALTOR® that is knowledgeable of the area is essential to getting the best deal on your home.

This post was originally published on RISMedia's blog, Housecall. Check the blog daily for real estate tips and trends for you and your clients.

Selling A Home: 5 Tips to Protect Your Home During A Showing

AGENT ADVICE, BUYING & SELLING

5 tips to protect sellers’ homes during a showing

With strangers wandering through the house, these precautions will make your sellers feel more comfortable

by John Lakatosh  Sep 3, 2015

Takeaways:

• Encourage the sellers to hide any valuables during a showing, including medication.
• Hide personal photos that show the homeowners’ faces.
• Make sure the sellers lock all doors except for the primary entrance where visitors will be entering.

There is a lot that goes into selling a home, and many homeowners often feel overwhelmed throughout the process. As a real estate agent, it’s your responsibility to make them feel at ease.

Homeowners might feel concerned about leaving their home during a showing — and rightfully so. Depending on the showing, there could be hundreds of strangers walking in and out of their home.

It’s easy to get caught up in making a home look perfect for a showing, but it is just as important to help clients keep their belongings safe while their home is on the market. There are things that both the agent and homeowners can do to stay safe.

It’s vital to help clients keep their belongings safe while the home is on the market.

CLICK TO TWEET

1. Hide valuables

bikeriderlondon / Shutterstock.com

Encourage the sellers to hide any valuables during a showing. Medications should be kept locked away in cabinets, as theft of prescription drugs is becoming more common during showings.

If the clients have a safe, they should lock up expensive items such as jewelry. Portable safes should be as hidden as possible, or kept with the seller for maximum security.

Also, consider asking the homeowners to keep relevant documents with private information in their possession, rather than leaving them at home. It’s impossible to keep an eye on everyone, and you never know when someone might decide to go through drawers looking to steal the homeowners’ identities.

In addition to valuables, hide weapons such as guns and large kitchen knives. Make sure these are locked up or removed entirely from the house. This precaution prevents theft and protects you.

2. Remove photos

Family photos are great for staging. They make the home feel “homey” and help prospective buyers imagine themselves in the home.

But with many people touring the home, you never know who could be there. Protect the family and hide personal photos that show the homeowners’ faces.

Breadmaker / Shutterstock.com

3. Encourage buyers to sign in

It might not be feasible to have every guest sign in for large showings. But for smaller showings, ask prospective buyers to leave their name and phone number.

That way, if there is suspicion of theft, you have a record of who entered the home during the open house. Signing in also helps determine how many people were in the home during the showing.

4. Limit access to the home

During a showing, it’s important to limit the number of accessible entrances. Make sure the sellers lock all doors except for the primary entrance where visitors will be entering.

When you arrive before the showing, check that all necessary doors have been locked and secured.

Keeping only one door open during a showing also makes it easier to track who is entering and exiting.

5. Secure the home

Securing the home is especially important if the homeowners have moved to another home while their old home is still on the market. Vacant homes are attractive to criminals.

At the minimum, encourage the sellers to secure the exterior of doors. They should not skimp on deadbolts and locks, as cheaper locks can be faulty.

As a real estate professional, you might also want to suggest a home security system to protect the home. There are many options available for security systems, including budget-friendly options.

With many prospective buyers entering and exiting the sellers’ homes, it is important to think about safety measures that protect homeowners and their identities.

Security will provide them with peace of mind knowing that they have an agent who is looking out for their best interests.

John Lakatosh is president of Crime Intervention Alarm Company, which provides custom security plans for businesses and homes throughout the Mid-Atlantic region.