My loan has been "Sold". What does that mean?
It's natural to wonder what it means when the servicing rights to your loan are "sold" to a new servicer. Some may even worry about this common occurrence. Have no fear, Freedom Mortgage is one of the nation's leading servicers of home loans. Read more to learn about the important role mortgage servicers play for homeowners.
Who "Services" My Loan and what's their role?
Your mortgage servicer may or may not be the mortgage company you worked with on your initial home loan. If you refinance or buy a new home through Freedom Mortgage, we usually service your loan. However, in some instances, your initial mortgage company will transfer servicing rights to another company with the skills and resources to service your loan well.
These transfers are common and are done for a variety of reasons. What's important to know is that your mortgage servicer issues your monthly billing statement, manages your escrow account (if applicable) and keeps you informed about your mortgage loan.
Your monthly statement
Each month, your servicer delivers a statement showing the progress you've made toward paying down your mortgage. Your mortgage servicer collects your payments and applies them towards principal, interest, taxes, homeowner's insurance and mortgage insurance (if applicable; commonly referred to as "PMI" or "MIP").
Managing your escrow account
If an escrow account was set-up when you took out your loan, it is used to hold funds to pay your property taxes and homeowner's insurance when those bills are due. Usually, at least two months' worth of funds are required to cover any tax rate or insurance premium increases. Your servicer performs an annual analysis and provides an escrow account statement detailing estimated taxes and insurance premiums for the upcoming year.
Keeping you informed
Keep an eye out for important communications from your servicer. They'll let you know:
- If your servicing rights are transferred
- Details about your loan in case of a natural disaster or financial hardship
- How to set up online accounts and automated payments
- About any changes to your account
At Freedom Mortgage, we look forward to answering any questions you may have about your account. You can send us an email to email@example.com with your account number.