if a lender is selling a client's mortgage/commercial loan what are the client's options?

In General Area - Asked by Anand B. - Jan 30, 2012
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Answer(s)

Rob M.
Lender/Mortgage Broker
Houston, TX

Find another lender to take the loan. You generally have no say in the matter. Your client should have recieved a disclosure about the possibility that another person or entity could purchase the note. Look closely in the paperwork it is all there.

Jan 31, 2012
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Donald J L.
Broker/Agent
Fort Lauderdale, FL

The client may have no options but it will depend on the mortgage agreement. Usually when a mortgage gets sold the terms remain the same and a new servicer is used to service the mortgage, the client would be notified and again, unless there is some specific clause in the mortgage agreement, the client probably will have no change in the mortgage.

Jan 31, 2012
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Nadina C.
Broker/Agent
Phoenix, AZ

By "client", I assume you mean borrower? Donald J's answer is correct as far as it goes. Generally, when a buyer buys a mortgage/commercial loan, it is buying it at a discount from the remaining principal. To me, that means that the borrower may be in a position to renegotiate the terms of the loan. I have even seen a commercial property owner enter into a stragetic bankruptcy to force the new mortgage lender to negotiate smaller payments and other provisions that make it easier to make the payments in a down market. Unless it is a very small loan or not much is at stake one way or another, I would advise a borrower to approach his/her options with a qualified attorney only.

Jan 31, 2012
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Chris S.
Broker/Agent
Coeur D'alene, ID

Borrower has NO say.
Client can contact qualified note buyers to get involved and try to buy the note themselves, but otherwise be prepared for a rollacoaster. We just went through this.

Oct 9, 2012
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Glen W.
Lender/Mortgage Broker
Atlanta, GA

In typical loan documents, the loans are assignable/ transferable so the borrower has no say. With that said, life could get "interesting" depending on why the loan was sold (is the note in default, is the term coming due, has the borrower's financial condition changed). All of these items will impact how the new lender interacts with the borrower and the options that are available. I have had banks sell notes that we had and the experience has ranged from no change to the existing lender to the worst possible experience ever depending on the situation. Good luck.

Jan 7, 2013
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