May
24
Is selling mortgages fraud? Can I refuse to pay?
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I heard this but I think its crap. Apparently you only have to pay whoever has the original paperwork … but I really dont think it works this way, does it? If it did, then why would anyone pay when their mortgages were sold?
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6 Comments
October 17th, 2009 at 12:58 am
Nope, lenders sell notes all the time. I’ve owned my house 7 yrs and the loan has been sold at least 4 times.
October 18th, 2009 at 8:16 pm
You are right–it is crap. Congratulations–your intelligence and common sense have led you to the correct conclusion. Most mortgages are sold by the original lender as a way of getting their money back so they can loan it out again. This helps supply money to borrowers and allows more people to own their own homes.
October 21st, 2009 at 4:16 am
it’s a normal practice. the terms remain the same
refusing to pay would cause a foreclosure…not a house for free
October 21st, 2009 at 7:08 am
When you sign a mortgage note, that note is bundled with hundreds of others and sold on the stock market as a Mortgage Backed Security. That security gets bundled with thousands of others into a REIT that gets securitized and sold again.
Part of the equation is the Servicing Rights (the co. that sends you your mortgage statement). This is a valuable contract, and it may be bought several times in the life of your mortgage. Litton Loan Servicing and Countrywide Home Loans makes a LOT of its revenue just on servicing mortgages other co.s have originated.
So, be patient with what seems like a big change. There really is no difference in your mortgage amount, only who is handling the $.
Best of luck!
October 22nd, 2009 at 3:47 pm
Its not crap at all. Them selling your mortgage has not effect on you at all. They sell because they need more money to loan out. This is regular business practice and there isnt anything wrong with it. Mortgages are traded like bonds, is there anything wrong with bonds? You will usually be paying to the same mortgage servicer, the people who you make the actual payments to and handles it, that doesnt change. So, you wouldnt even know who owns your loan, and it shouldnt really matter because you are obligated to pay the trustee anyways.
October 23rd, 2009 at 3:07 pm
Mortgages are sold all the time. It doesn’t release you from your obligation to pay whoever holds the note.
Sure you can refuse to pay. The lender will foreclose, your credit will be trashed and you will lose the house.