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I was wondering what kind of experiences y'all have had with large vs small institutions. Which ones have the best service, rates, etc? Also, which ones are less likely to sell my note? I have heard horror stories about people not knowing which company to send their payment to.
Any feedback would be appreciated, especially from realtors.
In our experience, your loan WILL get sold. One time at refinance, I was happy to be getting away from GMAC. A couple years later our loan was sold to... GMAC.
We've always been given plenty of advance notice when our loan was sold and transferred. Never been a problem. You can't control it anyway, so don't even try.
I'd go with the mortgage company you feel most comfortable with and can give you the best terms and rates.
One of the disclosures in your origination packet shows how many (as a percentage) of the company's loans have been sold in the last 3 years. Most companies will sell your loan, but there are some that don't.
My loan was sold twice before I even made my first mortgage payment. I got my loan through a small bank, who sold it to a medium sized bank, who then sold it to Wells Fargo.
There are clear and distinct differences between "selling the note" and the "servicing" of that note. In most cases, the holder of your note is not the servicer... and when you switch servicer, it doesn't necessarily mean your note was sold.
When people talk about the sale of your note they are most often referring to the securitization of the debt into a pool of mortgages where investors buy bonds paid yields with your payments.
The servicing of the mortgage is just simply who you deal with for customer service, who collects your payments, chases you for being late, etc.
At all times you have the right to see the chain title and ultimate holder of your note. There are very strict legal guidelines in how that is supposed to happen.
I will address the issue of local vs. non-local lenders. As a buyer in the current market (Metro DC), you may fair better using a local lender than a non-local/internet lender and here's why.
When you find the perfect home and want to write an offer to purchase, you must include a "pre-approval" letter that states that you are able to purchase the home which you will get from your lender. Typically listing agents and sellers like to see that the bank you are using is local because that bank will be more familiar with the area. When it comes to doing the appraisal, the appraiser will most likely be familiar with the area and will be able to not only use the comparables in the neighborhood, but will also know that this area is notoriously priced higher than other areas. Your realtor will most likely have a good relationship with one or several lenders which is extremely helpful in terms of getting your contract to closing. For me whether or not your loan will be sold is usually not as important as using a local lender that is familiar with the market. The lenders I use will write a pre-approval letter at 10:00 at night if needed - not so with a 9-5 lender. What happens if you find the home of your dreams on a weekend and you can't get your lender on the phone? Answer: you may have lost that dream home.
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