Why was my mortgage sold to Freddie Mac?

It's common for lenders to sell home loans to another company, including Freddie Mac. This practice allows lenders to make more home loans. If you received a letter titled "Borrower Notification: Freddie Mac Has Purchased Your Mortgage Loan," don't be alarmed.

What does Freddie Mac do with mortgages?

Fannie Mae and Freddie Mac buy mortgages from lenders and either hold these mortgages in their portfolios or package the loans into mortgage-backed securities (MBS) that may be sold. Lenders use the cash raised by selling mortgages to the Enterprises to engage in further lending.

Why did they sell my mortgage?

In hopes of a quicker profit, lenders will often sell the loan. If servicing a loan costs more than the money it brings in, lenders may attempt to sell the servicing of it to lower their costs. The lender may also sell the loan itself to free up money in order to make more loans.

What is the purpose of Freddie Mac?

Freddie Mac was chartered by Congress in 1970 to keep money flowing to mortgage lenders in support of homeownership and rental housing. Our statutory mission is to provide liquidity, stability and affordability to the U.S. housing market. Learn more about our business and our role in the nation's housing market.

What does it mean if my mortgage was sold to Fannie Mae?

Not so fast – in the vast majority of cases, that first mortgage will be sold to another party during your loan term. If that mortgage is transferred to Fannie Mae, it will either be serviced by your current lender or a new one, and your notification will come from both the old and new loan servicer.

How Fannie and Freddie Prop Up America's Favorite Mortgage | WSJ

Does it matter if my mortgage is sold?

A transfer or sale of your mortgage loan should not affect you. “A lender cannot change the terms, balance or interest rate of the loan from those set forth in the documents you originally signed. The payment amount should not just change, either. And it should have no impact on your credit score,” says Whitman.

Is it normal for your mortgage to be sold?

While it may feel surprising, there is no need to stress: Mortgages are bought and sold all the time. Mortgages are bought and sold all the time. If you receive a notice that your mortgage has been sold, the terms of the loan — your interest rate, monthly payment and remaining balance — will not change.

What is Freddie Mac scandal?

An accounting scandal erupted at the government-sponsored company in June 2003 when it disclosed that it had misstated earnings by some $5 billion — mostly underreported — for 2000-2002 to smooth quarterly volatility in earnings and meet Wall Street expectations.

Is Freddie Mac better than Fannie Mae?

Loan Programs

Fannie Mae offers the HomeReady loan, in which applicants cannot make more than 80% of the area's median income. On the other hand, Freddie Mac offers the Home Possible loan which requires that applicants cannot make more than the area's average income.

Who is eligible for Freddie Mac?

Qualifying for HomeOne Freddie Mac 97 percent financing

At least one borrower must be a first-time homebuyer. The property must be a one-unit primary residence including single-family residences, townhomes, and condos. You need at least 3 percent for your down payment. Homebuyer education is required.

Why does my loan servicer keep changing?

Often, a borrower wants to switch their student loan servicer because they dislike their current student loan servicer or the borrower experienced a problem with the servicer. Common complaints concern customer service conflicts, such as: The loan servicer was not helpful.

What percentage of mortgages are sold?

About two-thirds of home loans originating in the U.S. are sold here, according to data from the Credit Union National Association.

What types of mortgages does Freddie Mac buy?

Freddie Mac buys home mortgages, primarily from smaller banks and savings and loans. In doing so, Freddie Mac keeps its lender network liquid, so it can keep making loans. This has proven key to keeping the mortgage industry in continuous operation.

Are Freddie Mac loans fixed?

As a cornerstone of U.S. home financing, Freddie Mac purchases a variety of fixed-rate mortgages. Our fixed-rate mortgage offerings leverage the power of a fixed interest rate for the life of the loan.

Why is it called Freddie Mac?

The names, however, are simply described by both companies as creative spins on the acronyms for their original names -- the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).

How do you tell if your mortgage is Fannie or Freddie?

Fannie Mae can be reached at 800-232-6643 or Fannie Mae's website​. Freddie Mac can be reached at 800-373-3343 or Freddie Mac's website.

Is Freddie Mac an FHA loan?

No. The Federal Housing Administration is a government agency that insures loans made by lenders to borrowers with low to moderate incomes. FHA loans have more relaxed credit standards than conventional loans purchased by Fannie Mae and Freddie Mac.

What is the lag time for Freddie Mac?

Freddie Mac offers 30-year fixed-rate UMBS in addition to 20-year, 15-year, and 10-year securities. UMBS are backed by fully amortizing mortgages and pay on a 55-day delay schedule. Freddie Mac guarantees the timely payment of interest and scheduled principal on all UMBS issued by Freddie Mac.

Why was my mortgage transferred to SPS?

Homeowners are often transferred to SPS once they become delinquent on their mortgage payments. Many lenders try to protect their brand when it comes to foreclosing on homeowners.

What is a mortgage sale?

A power of sale is a clause that's written into a mortgage that gives the lender the authority to sell the property if the homeowner is in default in an effort to repay the loan debt. In terms of mortgages, a power of sale is very similar to a foreclosure. In fact, both terms are often used interchangeably.

What happens to a mortgage when you sell?

When you sell your home, the buyer's funds pay your mortgage lender and cover transaction costs. The remaining amount becomes your profit. That money can be used for anything, but many buyers use it as a down payment for their new home. Here's how the money is divvied up.

Can a mortgage servicer foreclose?

Servicers cannot foreclose on a property if the borrower and servicer have come to a loss mitigation agreement, unless the borrower fails to perform under that agreement.

What if my loan was bought by another company?

To be blunt: nope. Federal banking laws allow financial institutions to sell mortgages or transfer the mortgage loan servicing rights to other institutions, and consumer consent isn't required for them to do this. That being said, your lender does need to notify you if your loan will be serviced by a different company.

Is Freddie Mac a mortgage lender?

Fannie Mae and Freddie Mac are federally backed home mortgage companies created by the United States Congress. Neither institution originates or services its own mortgages. Instead, they buy and guarantee mortgages issued through lenders in the secondary mortgage market.

Is Freddie Mac a good company?

Freddie Mac Reviews FAQs

Is Freddie Mac a good company to work for? Freddie Mac has an overall rating of 4.0 out of 5, based on over 1,691 reviews left anonymously by employees. 82% of employees would recommend working at Freddie Mac to a friend and 66% have a positive outlook for the business.