Too Good to be true?

**Preston** · 07-21-2009, 02:24 PM

Recently we bought a house through a mortgage broker as he was able to get us a good deal and got it done for us..

Then the bank he got our mortgage through did something shady...

They sold my mortgage to Bank of America/CountryWide.

This is on my list of banks I refuse to do business with.

Now I am not stupid so I'm not going to do a refinance and eat the closing costs but I was talking to a representative of my bank where I do my regular banking through and they said they could possibly do a loan without any upfront costs, no closing cost or origination fee and probably the same interest rate. The only difference being they would not be able to set up the escrows. The interest rate may actually be .25% lower now too.

I don't want to play a game where my mortgage is thrown around from bank to bank and if I put my mortgage and everything through the same bank I would qualify for better return rates on CD's and also on lines of credit (which I do not use on a regular basis.)

To me it almost sounds like it is too good to be true and I was wondering if anybody else has had a situation similar to this happen?

Or should I just suck it up and just keep my mortgage through BOA?

**ml2620** · 07-21-2009, 03:00 PM

This is really very, very common. It's almost unavoidable. The only thing you could do is refinance and have it written into the mortgage that the mortgage will be held by the bank you negotiate with, but I can't imagine they would agree to it.

I feel the same way. I wanted to pay my mortgage to the local bank in town and keep my money local, but they said no way, they just sell the mortgages in bulk (like a mutual fund). And almost always, it goes to BofA or Countrywide. Mine started out with my local bank, and is now with Wells Fargo.

**Greebo** · 07-21-2009, 03:12 PM

Originally Posted by Preston

Recently we bought a house through a mortgage broker as he was able to get us a good deal and got it done for us..

Then the bank he got our mortgage through did something shady...

They sold my mortgage to Bank of America/CountryWide.

I'll bet you a box of donuts you signed a paper during the application process acknowledging that they might do this. It's pretty much standard operating procedure if you go through a broker.

Now I am not stupid so I'm not going to do a refinance and eat the closing costs but I was talking to a representative of my bank where I do my regular banking through and they said they could possibly do a loan without any upfront costs, no closing cost or origination fee and probably the same interest rate. The only difference being they would not be able to set up the escrows. The interest rate may actually be .25% lower now too.

My first mortgage on my primary residence is with my credit union, and they do something similar. Very low cost, no escrow management. I love it - we just set aside a fixed amount w/ every paycheck for taxes and insurance and pay it ourselves.

I don't want to play a game where my mortgage is thrown around from bank to bank and if I put my mortgage and everything through the same bank I would qualify for better return rates on CD's and also on lines of credit (which I do not use on a regular basis.)

Smart bank - they want the long term business. So does BoA/Countrywide - they're not likely to sell your mortgage again as long as you stay current. See, Brokers sell mortgages for the commissions, banks sell mortgages for the long term interest rates.

To me it almost sounds like it is too good to be true and I was wondering if anybody else has had a situation similar to this happen?

No, it's entirely plausible - just triple check all the sheets and ensure they really do NOT charge any closing costs, or if they do, that you'll recover the difference within 2 years or so (diff between payment now and payment after - and remember to factor in the escrow!)

**TigerGirl1226** · 07-21-2009, 04:25 PM

We've owned 2 homes and each time the mortgage has been sold. I understand it's pretty common.

**Judi Dial** · 07-21-2009, 04:39 PM

Our first mortgage wasn't sold, but the processing was. Security Pacific stupidly sold the mortgage processing including for those customers they'd had doing automatic payments from the Sec. Pac. checking accounts. The first notion I (or many of the people in this small desert town) had that our mortgage wasn't being serviced by our local Sec. Pac. was the late notice we got that said our mortgage was LATE!

There were so many steamed customers that day that there was a line, we all were furious. Seemed to me to be one STUPID idea, selling the mortgage servcing was fine, but those that were autopay out of your own bank???? Just ticked off a lot of local customers.

Our second mortgage wasn't sold, but we got it through a lender/developer who built the house.

Our third (and current) mortgage WAS sold, then we re-fi'd and it hasn't been sold since. I'd be delighted if it was, it's with Chase, a bank I love to hate these days!

Judi

**savvy_sniper** · 07-21-2009, 04:57 PM

When we bought our house (2 years ago) the mortgage was with Countrywide. They told us it would be sold and not to be surprised. We made one payment to Countrywide and then our mortgage was sold to CitiMortgage.

I know people who have had their mortgage sold numerous times.

**Michelle68** · 07-21-2009, 05:01 PM

Yep, our mortgage was sold a few years ago to Citimortgage. It happens all the time.

**FrugalMomof3** · 07-21-2009, 05:20 PM

We also have 2 mortgages and both have been sold before. Currently we do have one with BOA and so far so good.

**beks37** · 07-21-2009, 05:24 PM

It happens all the time. Our mortgage was through First Horizon Home Loans and then was sold to US Bank Home Mortgage. Your loan could be sold several times. I used to work at a local bank and they sell the loans, but not the servicing so payments and servicing always stays with them. That is very rare to find. If you refinance, make sure you check if the bank you refi with sells the notes and/or the servicing.

**craftypam** · 07-21-2009, 05:28 PM

I do agree that this is all the time. There are banks and or credit unions who will not do this.

**Debbie-cat** · 07-21-2009, 05:42 PM

Usually if it is too good to be true..it usually is.

**PB&J** · 07-21-2009, 05:48 PM

Ours was sold before we ever made a payment! lol We bought our house in March 2006, didn't have a payment due until May but it was a different company by then. It hasn't been sold again. Conveniently, it was sold to the same bank that we have savings and checking through, so it worked out nicely.

**frugalfranny** · 07-22-2009, 02:50 AM

I agree, my understanding is that it is pretty common practice.

Mine wasn't sold but I have friends that have had theirs sold.

**Telephus44** · 07-22-2009, 12:05 PM

We specifically worked with small bank/credit unions that hold their loans in house. There was documentation on each loan saying if they would reserve the right to sell mortage or not. Our current mortgage they sold the mortgage but retained the servicing rights, and I was ok with that. I have had some issues with the escrow account and it was great to be able to walk to the bank down the street and have them fix it.

Honestly, I'd probably re-fi to get away from BOA, but that's me. And when we bought our house, we did pay a higher rate than a broker, but we made that decision just to have the mortgage at a local bank.