The bulk of the mortgage industry is actually the secondary mortgage market. You, as a consumer, only see the tip of the iceberg
You can only originate a mortgage once, but that same mortgage and its servicing rights can be traded over and over again. Banks trade mortgages much like bonds.
You identify an interesting problem actually when you wonder why Newrez would want your mortgage. Lots of banks are having a hard time selling off their mortgages because they’re so low interest, and that creates a major liquidity issue. They aren’t able to originate new mortgages (or other debt for that matter) until they get the existing accounts receivable off their books.
Newrez’ interest in making that deal could be lots of different reasons. There are a lot of variables in each deal, with different levers to pull to make it work for both parties.
For a really simple example, your loan specifically may be appealing because, even though it’s low interest, its shorter term and has good credit/a history of consistent payment.
If it was *sold*, your mortgage was part of a larger pool of mortgages bought as a package, probably with a higher average interest rate than yours. Newrez likely isn’t in the business of originating loans, just buying and servicing them. Newrez could also just be getting a cut for servicing your mortgage as well, if Mr. Cooper wants to keep the debt on their books but doesn’t want to deal with servicing.
Mr. Cooper, on the flip side, potentially just offloaded a bunch of accounts receivable in exchange for capital that can now be re-lent. That allows them to collect more revenue through origination fees, and issue more notes at higher interest - either to be collected and serviced in house or sold off again to another institution
That’s right. The loans, once pooled, don’t tend to get traded since they’re collateral for agency bonds. If loans moved around, agencies would blow a gasket off their collateral pool was constantly gutted. Plus it would make it incredibly difficult to value that security of the pool was constantly changing asset characteristics through changes in WAC, WAL, seasonings, etc. Servicing rights, however, can change pretty easily.
There are servicers only interested in your Escrow Account (Taxes and Insurance). For the majority, they get an interest free loan on your Escrow account for months. Multiply that x1,000 loans and its real money.
When I got below 80% and turned my escrow off, my loan was sold within 30 days.
Question, what was the advantage of turning off your escrow before payoff? Did you then roll your own escrow from a HYSA so you could keep the earned interest?
For me, yes. I don't give interest free loans to anyone, whether it be my loan servicer or the US Govt via taxes/refunds. I'm retired now, but up until the late 90's 5% interest on a Money Market account was the norm.
For others, whether it be small business owners or independent contractors, it could be a cash flow issue. Some businesses barely break even all year, but make it all up during the US holiday season (Xmas). An independent contractor may need to work on a project for 2-3 months before getting a large paycheck at the end.
Unemployment and/or disease related govt mandated stay-at-home (and not get paid) orders make cash-flow something every non-essential worker must consider.
Huh, really seems like chump change given there has to be some business overhead. but I guess the scale it adds up.
My loan was sold when interest rates were around 2%ish.
So say a 4000 average escrow balance. Maybe $80-120 in interest back then and they paid some non-zero interest to me. They had phone support, website w/ payment portal etc.
Bounced over from another thread. This way interesting. I'm going through issues with parent to child tax rates. Once I started my own escrow my servicer changed. That's probably the reason you mentioned?
What a world.
Additionally, some banks/servicers buy or sell loans/servicing based on the risk of default. Some are willing to gambles by having certain percentages of their portfolios being more risk forward and are willing to deal with foreclosures if needed. Some would rather have clean and simple low default portfolios.
AR vs. AP is backwards in this a few times.
Mr. Cooper sold the mortgage which is AR to them for cash to invest. It's not an account payable from their point of view.
It’s very unlikely any of this is true. I trade mortgages and MBS professionally. NewRez and Mr. Cooper are servicers. Given the loan size it’s almost certain that this loan was sold into an agency MBS when it was originated, in which case it’s likely still in that MBS. What probably happened is a large pool of servicing rights was traded from Mr Cooper to NewRez. Doesn’t impact the borrower at all other than the nuisance of setting up payments if the ACH doesn’t transfer automatically
Just piggybacking here - Newrez does business under the trade name Shellpoint Mortgage Servicing and they are a legitimate (and large) mortgage servicing company. They are making money by servicing the mortgage, which is probably ultimately owned by a European pension fund or some other non-active investor as part of a larger bundle.
This is partially why we went with a long-standing relationship at a credit union where they portfolio nearly 100% of their loans.
No guarantee, but lowering the chance of our loan being sold to shady banks we don't want to do business with like Wells was a factor for us.
Does the US recognise equitable interests in property? It's another layer of complexity in other common law jurisdictions like the UK and Australia. Your lender can effectively "sell" your mortgage while legally retaining it. Your mortgage can be "sold" on endlessly without you ever learning about it.
This is normal and has nothing to do with you. Banks buy and sell mortgages all the time, it's basically like trading bonds. The bank holding your mortgage wanted the cash and the bank buying your mortgage wanted the investment/future returns.
The community bank I refinanced with told me beforehand that they would "sell the paper" before the end of the day. I was assured that there would be no difference in the terms. I ended up at WaMu until Chase bought them out. I experienced no problems whatsoever.
My mortgage was traded to Fifth Third. They were horrible. I had no control or choice.
I wish there were consumer protections here.
I refinanced and got away from them. I was gambling that the next one would be better.
You could demand that they prove they hold the actual paper to your loan. If they can’t provide proof, you may have a case to not pay them. We always assume the company is aboveboard, but sometimes they play loose.
Well, it could be a change in servicer, which isn’t necessarily “selling” your mortgage. Your loan gets packaged, if it’s a conventional loan (or even if it’s not), agency bonds get issued. The bonds rely on the loans to pay. That’s how it all works to keep the cycle going. So your loan is probably warehoused somewhere with a trustee who manages the asset, but the servicer can change. They just make sure you are getting invoiced and pay your loan. They report those payments to the trustee who then sends your payment to the investor that bought those agency bonds. Every participant gets their fee (servicer included). So I’m changes of servicer, they send you a letter saying “hey, this entity is now your servicer. You’ll start getting statements from them instead of us now.” They don’t hold your loan, they just get paid to manage (service it) on behalf of the investor.
Great explanation. Both of those companies are in fact mortgage servicers. Those mortgage servicers then go over step further and hire subcontractors to service the mortgage . There's big companies, usually CoreLogic or Lareta who pay the property taxes and insurance.
Same here, besides all the letters they send about refinancing we’ve had no issues with payments or escrow account issues. Caliber tried their hardest to fuck everything up every chance they got so we were expecting the worst when Newrez took over but we were pleasantly surprised.
The refinancing letters are really funny. I just bought my house 1.5 years ago and rates have only gone up, but they still send me letters about refinancing.
I refinanced with NewRez in 2020 and they were my mortgage company when I sold my house this year, no issues, and a website that was worlds ahead of PNC!
Same. I think they had a different name when they bought mine, then changed to Newrez. No issues. Then I refinanced and ended up with a new lender who sold to another. It’s common.
NewRez - actually their old name which eludes me now - has carried our home mortgage since we refinanced with our credit union in 2013 or ‘14. The credit union shopped for mortgages for us and NewRez had the deal. No issues with them.
Secondary mortgage market, specifically MBS are sold grouped together. Basically you’re mortgage was likely sold along with others and the buyer gets a safe return along with a cash discount of the total mortgage amount (as the interest rate is lower then the us gov bonds)
> Basically you’re mortgage was likely sold along with others and the buyer gets a safe return along with a cash discount of the total mortgage amount (as the interest rate is lower then the us gov bonds)
That makes sense. Has this practice of selling mortgages increased in recent years? My father had two mortgages - one with Wells Fargo for 30 years and the other with a local bank.
Pre 1990s it was not that common, but with the creation of mortgage backed securities and the explosion of servicer firms it's greatly increased in this century.
Your individual mortgage wasn't purchased, it's bound together with tens of thousands of other loans.
This is why I get my loans from a local mutual bank. They hold the loan. If you ever get another one ask if they hold and service the loan. At least then it probably won’t get sold unless the place goes belly up.
Selling a loan frequently results in a transfer of servicing. Some servicers are pretty good. Some are merely okay. Some are dumpster fires. I worked for a major servicer for 14 years and definitely saw my share of fuck ups, but overall, people wanted to do their jobs right and were responsive to issues identified by internal or external oversight groups.
Conversely, one of our major competitors offshored the entire customer service department and most of the business functions, then laid off most of their compliance and audit staff - despite being under a consent order from the CFPB.
Also, different investors may offer different foreclosure prevention option. That won't be relevant for most people, but shit happens, and it's better to have an investor and servicer who are willing to make a real effort to avoid foreclosure.
Because I like simplicity, consistency and am so busy I barely read my mail. The notices arrive at the same time, adjustments, the escrow is the same, etc etc.
Not to mention the underwriting on a brokered loan is a hassle if you have anything except a vanilla W2 tax return.
One throat to choke.
> no issues I sold the place
Did you experience issues when trying to sell? Bought in 2020 through Caliber, and last year my loan was sold to Newrez. No issues thus far, but getting ready to sell. Now I'm nervous about selling.
Are you me?!
I bought in 2020 with Caliber as well. Switched to Newrez last year.
Newrez has been fine thus far. I’m hoping my loan doesn’t get sold/serviced by anyone else going forward.
Did your credit take a hit as well? When Newrez acquired my loan from Caliber, my credit score dropped by like 150 pts. 😳😐 I was so pissed. No say in the acquisition, yet *my* credit takes the hit? Ugh. Thankfully, it was only temporary, and it went back up within ~45-60 days. But still. Very unsettling thing to wake up to.
No, thankfully I didn't have any major purchases going on at the time that needed any credit involvement, but it was still just frustrating, even if just temporarily.
For what it's worth, I've had no problems with Mr. Cooper, and I think their online UI is pretty slick. My first mortgage was sold to them back when they were still Nationstar, and I find the name in general somewhat amusing, can't help but always think of that show Hangin' with Mr. Cooper. My second mortgage was sold to them within a month of closing. I think of it like buying/selling mortgages is to banks what buying/selling stocks is to an average person, there's probably the numbers to back it up, but it's not going to make sense to only look at one or two transactions at any given slice of time.
Mr Cooper sounds like something you name a cat, not a mortgage servicing company.
I never had a mortgage serviced by them but I too find the name amusing.
I called USAA because I had Nationstar and it was sold to Mr Cooper. I called them and told them that it sounded like a scam and they assured me it wasn't. And I said what the hell kind of name is Mr Cooper for a mortgage company? It sounds really sketchy and you all need to tell your clients that it is legit.
Hangin' with Mr. Cooper is where they got the name - some focus groups loved it for some reason. I worked there when the name was announced to the staff and the expressions were priceless.
I always wondered about the employee reactions. I worked in Secondary for a lender that sold loans to Nationstar and we could not believe the name change was serious. We had so many borrowers and originators reaching out to our Servicing dept when they got their goodbye letters because they thought it was a scam.
Our Mr Cooper AE told us how much was spent on the marketing firm for the rebranding. I don’t remember the number but I remember being shocked at how much it was.
I also had my first mortgage by nationstar back in 2015, then it sold to Mr. Cooper. I refinanced in 2021 to a 15yr 2% and then it just sold again this year to Roundpoint. Both Mr Cooper and Roundpoint were easy enough to pay online so no complaints yet!
So there are two parts of a mortgage. The actual mortgage and then a thing called the servicing right. The servicing right is the right to collect payments from you. That right is worth about .25% of the principal balance. The servicer keeps that money and sends the rest to the people who actually own your mortgage.
Servicing rights are sold all the time. Sometimes Mr Cooper just wants cash now. Sometimes someone offers them more money then they think they will get (ie if they estimate you’ll refi in a year but a buyer pays cash now for 1.5 years of payments).
Your servicing right is just part of a big bundle. Each buyer wants specific things in the portfolio they buy.
If you don’t want this to happen you have to work with banks that promise not to sell the servicing although usually they won’t put that into a contract.
Your post is extremely will written and easy to read. If you don’t mind, can you answer one more question?
Who “owns” the mortgage than? The original company who gave you your mortgage?
Virtually never. The mortgage part (the loan) is sold to investors they ‘own’ your mortgage. For example in the U.S. a lot of insurance companies are mostly only allowed to invest in mortgage or treasury bonds. But they don’t want anything to do with actually dealing with customers so they have the servicer handle all that.
This can create a mess if you default. Since the servicer doesn’t own your mortgage and since it might be some big institution(s) it can be hard to get approval to make unique arrangements with you.
It has nothing to do with you. Banks buy sell and trade mortgages, that is basically what they do. Of Citibank sold your mortgage it was probably just because they were dumping lower interest mortgages in favor of funding higher interest mortgages from the payout they got from selling the mortgage to another bank or company who likely got to buy it at a bit of a discount to pad out their own collection.
If anything making every payment would make your mortgage easier to sell. I imagine a bank would struggle to sell a mortgage that was not in good standing.
Banks can do it because it is their mortgage so they can sell it at anytime as they see fit without your permission.
Have you googled the companies? Mr. Cooper is nationstar mortgage, just rebranded. They're one of the biggest (if not the biggest) mortgage servicers in the US.
If they just sold your mortgage, be sure that the new company has your insurance docs on hand. That can fall through the cracks during a transfer of mortgage ownership. If they don't have it, you'll likely get a notice telling you that they'll increase your payments to buy insurance for you.
NewRez has been sending letters to new clients asking for proof of 'hazard insurance' (not a thing in NYC with coop apartments, and it looks like they did get a lot of loans originated by Citi). Turns out they just mean homeowner's insurance and will take existing proof of coverage.
First of all… banks trade mortgages like a five year old trades Pokemon. They just do it because that’s what you do.
There’s an entire section of you bank with employees who are paid to do this and they pretty much just have to justify their existence.
Secondly… why are you paying extra on your mortgage. Why would you pay off a 2% mortgage instead of making 6-8% from a dividend paying stock? You’re leaving money on the table.
Now, I’m not gonna tell you what to do, you sound as if you live comfortably.
But the wealthy get rich by making money off of taking out 5% loans millions at a time and using that money to make 8% gains. And never have to pay taxes on it!
It is how business works. We look at homes as places for families and our friends. Banks and lenders look ar us as numbers on a p/l statement. Don't take it personally, Think of yourself as a professional sports athlete who's just been traded.
Happened to me twice with mine prior to my last refi. At one time I was with Loan Depot, which I thought sounded pretty sketch, but IDK, Mr. Cooper and Newrez might be worse LOL. Luckily they can be named anything and it doesn't really matter if you make your payments. :)
I work for one of the major property tax firms that loan servicers hire to handle the tax side of things. I manage and interact with around 20 different servicers. They all have sketchy names. No idea why.
Mine got sold 3 times in the first 3 years. I eventually refinanced with a credit union and they don’t sell it. I wasn’t specifically looking for that but they had a great rate.
Your loan servicer changed. Likely not who holds your mortgage, yes it happens
Your mortgage likely got sliced and diced up into MBSs long ago, only servicing rights involved not sale or mortgage
Same thing just happened to me. My mortgage got sold off to another company, a month after closing. Discover gave me a heads up that another account was opened up, which was just my mortgage under a new company. Should I be concerned that this will affect my credit score?
You’ve gotten a lot of good answers here.
Just to reassure you- both Mr Cooper & NewRez have been around for awhile. Both companies have purchased and/or merged with other companies. For example- NewRez has purchased Ditech, PHH and Caliber Funding in the last 5 years.
The reason you’ve heard of Citibank and not the other two is that Citibank spends zillions in advertising and the others don’t. (Among other costs.) You pay that cost in a higher interest rate. Cheaploanz the buys those loans, and since they don’t have advertising costs , etc. they can buy them at a lower rate.
>closing costs
Usually what happens is the lender hides the closing costs in the loan amount. Its not that there is no closing costs. There are just no immediate out of pocket costs.
Mr. Cooper used to be Nationstar. They rebranded themselves. They’re actually one of the largest mortgage servicers in the country and one I see the most often in my line of work. Newrez falls under Caliber and Shellpoint. All big legit companies. Kinda like how Quicken pulled a “Rocket Mortgage” to seem cooler.
No large mortgage company will really ever hold your loan forever unless you fall into a specific platform in their portfolio. They will sell your loan to make room for more buying power.
If I owe you $1000 and I agree to pay you $100 a month for 12 month for total of $1200. Someone comes along and says they will give you $1100 today you cash out and can loan the money again..
There are a million moving parts to a mortgage loan.
The guy/ woman you sat across the table from and spilled your life to is just the tip of the iceberg. That person charges you a 1% fee for origination. It costs about 0.75% for credit report, appraisal, inspection, etc. After closing they put your loan together with 1,000 others and sell them. They get about 1-2% for that.
They are then packaged and sold to a federal agency, who in turn resells them as a mortgage backed security. And of course every step of the way, everybody sucks some of the vigorish out.
Fast forward 6 weeks and you send your first of many payments to somebody you were directed to mail it to. That is the servicer. And guess what? He sucks out 1% of the principal and sends the rest to the actual owner of the loan. Remember the Federal Agency?
And there can be still another guy involved who actually is responsible for holding the physical documents (note and deed of trust). This is not the servicer but he does get paid of course. I and the people who worked for me once had to review about 100,000 of these in a banks vault to make sure they are there. That was boring.
TLDR the people you send your check to probably are just the servicer of the loan, not the owner.
I hate this! We’ve had a mortgage for almost 30 years, 10 with the last company (did a huge renovation that adds 700 sf and another 10years. Yet the “10years” (and 20 with the other company) count as 3 years on my credit report because it’s been sold so many times!
So my only “risk” or negative on my credit report is that I don’t have any long debt payments.
[https://app.joinhandshake.com/employers/newrez-caliber-and-shellpoint-160946](https://app.joinhandshake.com/employers/newrez-caliber-and-shellpoint-160946)
What does Newrez gain by purchasing a loan like mine?
They get a loan they don't need to pay out on very much, so thats nice. Your loan wasn't cherry picked. It was sold as part of a package by Mr.Cooper to Newrez.
Buying your loan makes them bigger and in finance bigger is better.
Mortgages are simple loans.
Most of the interest is being paid in the beginning.
XYZ bank originated your loan and took all the interest payments with very little principle paid for themselves.
After two or three years they sell it to ABC bank, they then take the interest payments and payoff a little more principle.
ABC bank found another bank to unload the loan to, now Newrez bank is stuck with your low interest payment loan. I doubt they find a buyer.
The age of a mortgage doesn't matter. If someone has a $300,000 mortgage at 6% interest, he's paying $1,500/month in interest. If his mortgage is down to $30,000, but his mortgage is sold as a bundle of 10 mortgages all with $30,000 left at 6% interest, the new servicer picks up $300,000 in principal, with $1,500/month in interest
I want to edit a loan agreement to say “if the loan gets sold the balance becomes $0” and then sign and return. Kind of like that guy who wrote in the credit card agreement that the credit card company owes him and he signed it and the credit card signed it and the court found the contact legit and the credit card company had to pay the man.
Mr. Cooper is a big mortgage firm. I guess they are losing money on you and so sold off your mortgage to somebody else. Why does it bother you? You should just keep paying the mortgage
They are legitimate company, but I dislike them.
If you pay on time, check regularly and make sure you read mail or login monthly to avoid mistakes. You should set up payment notifications, etc.
I have a couple properties with Newrez mortgages. They buy a lot of mortgages. I personally feel they are a bad servicer, but I am biased. They are a legitimate company however eve if they have poor reviews. It's not like anyone takes time to post a positive servicer review, so I'm guessing most have poor reviews.
1. get online access,
2. watch carefully
3. make sure taxes and insurance are covered and that payments are correctly applied and cover any loan adjustments.
4. I had auto payments initiated from bank. They may auto adjust if they initiate the pull, but this has other risks.
I had auto payments and when taxes increased they my payment didn't adjust automatically (not sure why) other lenders / services do this for me. So I was $25 short for about two months before I noticed.
I called them, paid over phone and the agent said no problem won't hurt my credit. He said they should have applied my mortgage payment to mortgage balance first and not to taxes and it wouldn't have caused the issue. Of course their were fees too.
...Then the accidentally transcribed my loan number as my payment method (instead of my bank account number), causing a draft rejection and about a $30 fee.
I didn't know this until I got the letter and was another month late causing my credit to drop 150 points now showing like 60 (or 90? days late).
I had to fight, ask for recordings of phone calls to be reviewed, demand a manager, write a letter, etc.. It was me who recognized they attempted to draft my loan number and not my bank account number. They acted as if I tried to swindle them and was a bad person.
It took about two years to get back to an 800 credit score. I'm still down about 20 points. I eventually got the fee dropped but the mark is still on my credit. So watch carefully and you will be fine. At end of the day I am responsible for paying the right amount on time. They suck but I made mistakes by not closely paying attention.
Did I mention I hate Newrez?
When your mortgage gets sold and you have your taxes and insurance paid through you mortgage payment, make sure the new company is paying those extra items. It doesn't happen often, but there are cases of taxes in particular not getting paid for years. It can all be straightened out, but it's messy and time consuming. It happened to my buddy which is why I have always paid my taxes and home owners insurance separately.
You’ve gotten a lot of good answers. I have a question for you. Why would you pay extra on a loan that’s locked in at 2% interest when you could put that money into HYSA and get over 4%? Or max out a tax advantaged retirement account or buy bonds or cds or any number of investments that would far outpace that 2% return?
It’s pretty common for mortgages to be assigned to new mortgage companies. Sometimes it’s just a change in loan servicer. It should not affect you other than where you send your payments.
That’s interesting. My mortgage was sold to Wells Fargo from a local bank the day we closed on the house. That was 4 years ago. Wells Fargo just sold our mortgage to Mr Cooper last week and I had never heard of them either
Mr. Cooper and Newrez are Independent Mortgage Brokers (IBMs) with separate "sister" companies that handle the servicing for their own originations and other smaller IBMs. I used to work in the compliance department for Newrez’s sister company a few years ago. I also worked for another company that sold MSRs, handled compliance audits for various banks or investors and whole loan trading.
Mortgages are collateralized debt that get traded regularly amongst other banks, hedge funds, sovereign wealth funds and other institutional investors.
Mine got sold to Newrez as well, and honestly, I like them.
Mind you, I haven’t had issues, knock on wood, but I think the user interface is nice, their website hold a lot of information and data I like, it’s easy to add extra principal if you want, (I do $250 per month, giving me a 13th payment a year) and then the tables show that well.
Overall I like them.
I closed on my house in November 2022. My mortgage has been sold twice to different servicers in just over 6 months. That's the business.
Understand that mortgages are not sold individually, but in bundles. When it was sold, your loan was heaped in with a ton of other loans. Companies buy and sell bundles of mortgages for all kinds of reasons, but the most common reason is to balance their portfolios.
That happened on our first house was never quite sure who to send payment too. The mortgage was sold 6 times in 10 years. When we bought out next home we dealt with local Saving and Loan. Have bought 2 houses and remortgage 3 times in 25 years with this company and they don’t sell their mortgages. Plus dealing local they would call us if it was advantageous to refinance the mortgage. Few in the industry would do that!
Your loan likely was sold, but not to NewRez. It services loans, but doesn’t purchase them. NewRez is a big player in the servicing industry; surprised you haven’t heard of them.
Also, the deed of trust you executed in connection with the loan says the loan can be sold or servicing transferred, without your consent. It honestly shouldn’t have any effect on you so long as you pay back the loan.
Heres the reason: The bank that bought it may be making much more than 2%. The way that these mortgages work when sold is that there is a value of the mortgage that will be paid back but then the actual value of the mortgage as a security. They aren’t the same. There is a good chance that Mr. Cooper took a big loss on your mortgage and sold it to get it off their books. They probably sold it for well under 70k as no investor would accept only 2% today. So… probably, it was sold at a 5-7% yield with some adjustment for the risk you’ll pay it off early and the new buyer won’t get the interest. Even though the actual mortgage note may be yielding an equivalent 5-7% due to a change in value, you still pay just 2% and never see all that on the backend.
I’m not going to do the math on it, but at 2% your loan was initially worth 70K to Mr Cooper. Now at 7 percent equivalent yield it may only be worth buying for something like 60K.
The bulk of the mortgage industry is actually the secondary mortgage market. You, as a consumer, only see the tip of the iceberg You can only originate a mortgage once, but that same mortgage and its servicing rights can be traded over and over again. Banks trade mortgages much like bonds. You identify an interesting problem actually when you wonder why Newrez would want your mortgage. Lots of banks are having a hard time selling off their mortgages because they’re so low interest, and that creates a major liquidity issue. They aren’t able to originate new mortgages (or other debt for that matter) until they get the existing accounts receivable off their books. Newrez’ interest in making that deal could be lots of different reasons. There are a lot of variables in each deal, with different levers to pull to make it work for both parties. For a really simple example, your loan specifically may be appealing because, even though it’s low interest, its shorter term and has good credit/a history of consistent payment. If it was *sold*, your mortgage was part of a larger pool of mortgages bought as a package, probably with a higher average interest rate than yours. Newrez likely isn’t in the business of originating loans, just buying and servicing them. Newrez could also just be getting a cut for servicing your mortgage as well, if Mr. Cooper wants to keep the debt on their books but doesn’t want to deal with servicing. Mr. Cooper, on the flip side, potentially just offloaded a bunch of accounts receivable in exchange for capital that can now be re-lent. That allows them to collect more revenue through origination fees, and issue more notes at higher interest - either to be collected and serviced in house or sold off again to another institution
This was very well explained and could be used in any business class lecture today.
The best answers are the ones that you read and then leave the thread. We're done here, kids.
Except in this instance Mr Cooper and NewRez are more than likely trading the Mortgage Serving Rights (MSRs) and not the the loan in and of itself.
That’s right. The loans, once pooled, don’t tend to get traded since they’re collateral for agency bonds. If loans moved around, agencies would blow a gasket off their collateral pool was constantly gutted. Plus it would make it incredibly difficult to value that security of the pool was constantly changing asset characteristics through changes in WAC, WAL, seasonings, etc. Servicing rights, however, can change pretty easily.
I think you’re probably right.
But today is Saturday.
Plenty of MBA classes are Saturday and Sunday ;)
I tried to write it in a whiny voice to make it funny. Let me try again: But today is Saturday!
There are servicers only interested in your Escrow Account (Taxes and Insurance). For the majority, they get an interest free loan on your Escrow account for months. Multiply that x1,000 loans and its real money. When I got below 80% and turned my escrow off, my loan was sold within 30 days.
Question, what was the advantage of turning off your escrow before payoff? Did you then roll your own escrow from a HYSA so you could keep the earned interest?
For me, yes. I don't give interest free loans to anyone, whether it be my loan servicer or the US Govt via taxes/refunds. I'm retired now, but up until the late 90's 5% interest on a Money Market account was the norm. For others, whether it be small business owners or independent contractors, it could be a cash flow issue. Some businesses barely break even all year, but make it all up during the US holiday season (Xmas). An independent contractor may need to work on a project for 2-3 months before getting a large paycheck at the end. Unemployment and/or disease related govt mandated stay-at-home (and not get paid) orders make cash-flow something every non-essential worker must consider.
Huh, really seems like chump change given there has to be some business overhead. but I guess the scale it adds up. My loan was sold when interest rates were around 2%ish. So say a 4000 average escrow balance. Maybe $80-120 in interest back then and they paid some non-zero interest to me. They had phone support, website w/ payment portal etc.
Bounced over from another thread. This way interesting. I'm going through issues with parent to child tax rates. Once I started my own escrow my servicer changed. That's probably the reason you mentioned? What a world.
I believe Newrez is part of the Caliber family.
Yep. And caliber has always been great for me. Super easy to deal with
Additionally, some banks/servicers buy or sell loans/servicing based on the risk of default. Some are willing to gambles by having certain percentages of their portfolios being more risk forward and are willing to deal with foreclosures if needed. Some would rather have clean and simple low default portfolios.
AR vs. AP is backwards in this a few times. Mr. Cooper sold the mortgage which is AR to them for cash to invest. It's not an account payable from their point of view.
It’s very unlikely any of this is true. I trade mortgages and MBS professionally. NewRez and Mr. Cooper are servicers. Given the loan size it’s almost certain that this loan was sold into an agency MBS when it was originated, in which case it’s likely still in that MBS. What probably happened is a large pool of servicing rights was traded from Mr Cooper to NewRez. Doesn’t impact the borrower at all other than the nuisance of setting up payments if the ACH doesn’t transfer automatically
Well, its *true*, but i think you’re probably right in the context of OP’s mortgage specifically - in that it is being serviced and not purchased
You have any resources on trading MBS? Been something I've wanted to break into for a while. Nice username too.
Just piggybacking here - Newrez does business under the trade name Shellpoint Mortgage Servicing and they are a legitimate (and large) mortgage servicing company. They are making money by servicing the mortgage, which is probably ultimately owned by a European pension fund or some other non-active investor as part of a larger bundle.
I learned some things reading your post well explained to the different scenarios in the mortgage market. Thank you for the insight!!!
This is partially why we went with a long-standing relationship at a credit union where they portfolio nearly 100% of their loans. No guarantee, but lowering the chance of our loan being sold to shady banks we don't want to do business with like Wells was a factor for us.
Does the US recognise equitable interests in property? It's another layer of complexity in other common law jurisdictions like the UK and Australia. Your lender can effectively "sell" your mortgage while legally retaining it. Your mortgage can be "sold" on endlessly without you ever learning about it.
Change of service is certainly required by law to give notice to the debtor.
Don't you mean accounts receivable? Owning a mortgage means you receive money from the debtor.
Ha yep. Thanks
Wonder if NewRez has something going for them because my mortgage is also through them now.
You need to teach a class ASAP
This is normal and has nothing to do with you. Banks buy and sell mortgages all the time, it's basically like trading bonds. The bank holding your mortgage wanted the cash and the bank buying your mortgage wanted the investment/future returns.
The community bank I refinanced with told me beforehand that they would "sell the paper" before the end of the day. I was assured that there would be no difference in the terms. I ended up at WaMu until Chase bought them out. I experienced no problems whatsoever.
My mortgage was traded to Fifth Third. They were horrible. I had no control or choice. I wish there were consumer protections here. I refinanced and got away from them. I was gambling that the next one would be better.
You could demand that they prove they hold the actual paper to your loan. If they can’t provide proof, you may have a case to not pay them. We always assume the company is aboveboard, but sometimes they play loose.
Well, it could be a change in servicer, which isn’t necessarily “selling” your mortgage. Your loan gets packaged, if it’s a conventional loan (or even if it’s not), agency bonds get issued. The bonds rely on the loans to pay. That’s how it all works to keep the cycle going. So your loan is probably warehoused somewhere with a trustee who manages the asset, but the servicer can change. They just make sure you are getting invoiced and pay your loan. They report those payments to the trustee who then sends your payment to the investor that bought those agency bonds. Every participant gets their fee (servicer included). So I’m changes of servicer, they send you a letter saying “hey, this entity is now your servicer. You’ll start getting statements from them instead of us now.” They don’t hold your loan, they just get paid to manage (service it) on behalf of the investor.
Great explanation. Both of those companies are in fact mortgage servicers. Those mortgage servicers then go over step further and hire subcontractors to service the mortgage . There's big companies, usually CoreLogic or Lareta who pay the property taxes and insurance.
My mortgage is with Newrez. They're fine, you don't need to worry.
Same here, besides all the letters they send about refinancing we’ve had no issues with payments or escrow account issues. Caliber tried their hardest to fuck everything up every chance they got so we were expecting the worst when Newrez took over but we were pleasantly surprised.
The refinancing letters are really funny. I just bought my house 1.5 years ago and rates have only gone up, but they still send me letters about refinancing.
I refinanced with NewRez in 2020 and they were my mortgage company when I sold my house this year, no issues, and a website that was worlds ahead of PNC!
Same. I think they had a different name when they bought mine, then changed to Newrez. No issues. Then I refinanced and ended up with a new lender who sold to another. It’s common.
I originated my mortgage with NewRez. Horrible company.
NewRez - actually their old name which eludes me now - has carried our home mortgage since we refinanced with our credit union in 2013 or ‘14. The credit union shopped for mortgages for us and NewRez had the deal. No issues with them.
Secondary mortgage market, specifically MBS are sold grouped together. Basically you’re mortgage was likely sold along with others and the buyer gets a safe return along with a cash discount of the total mortgage amount (as the interest rate is lower then the us gov bonds)
> Basically you’re mortgage was likely sold along with others and the buyer gets a safe return along with a cash discount of the total mortgage amount (as the interest rate is lower then the us gov bonds) That makes sense. Has this practice of selling mortgages increased in recent years? My father had two mortgages - one with Wells Fargo for 30 years and the other with a local bank.
Iit’s been a thing since the Great Depression, and is extremely common. Not sure of the rate of transaction
Pre 1990s it was not that common, but with the creation of mortgage backed securities and the explosion of servicer firms it's greatly increased in this century. Your individual mortgage wasn't purchased, it's bound together with tens of thousands of other loans.
This is why I get my loans from a local mutual bank. They hold the loan. If you ever get another one ask if they hold and service the loan. At least then it probably won’t get sold unless the place goes belly up.
What is why? How does the sale of the loan impact you in any way?
Selling a loan frequently results in a transfer of servicing. Some servicers are pretty good. Some are merely okay. Some are dumpster fires. I worked for a major servicer for 14 years and definitely saw my share of fuck ups, but overall, people wanted to do their jobs right and were responsive to issues identified by internal or external oversight groups. Conversely, one of our major competitors offshored the entire customer service department and most of the business functions, then laid off most of their compliance and audit staff - despite being under a consent order from the CFPB. Also, different investors may offer different foreclosure prevention option. That won't be relevant for most people, but shit happens, and it's better to have an investor and servicer who are willing to make a real effort to avoid foreclosure.
Because I like simplicity, consistency and am so busy I barely read my mail. The notices arrive at the same time, adjustments, the escrow is the same, etc etc. Not to mention the underwriting on a brokered loan is a hassle if you have anything except a vanilla W2 tax return. One throat to choke.
It's always been this way with secondary lenders or loans placed by mortgage brokers.
My mortgage got sold to Newrez at one point. Seemed fine, no issues until I sold the place.
> no issues I sold the place Did you experience issues when trying to sell? Bought in 2020 through Caliber, and last year my loan was sold to Newrez. No issues thus far, but getting ready to sell. Now I'm nervous about selling.
New Rez and Caliber merged
Yeah, I figured as much.
Do you know why? And why did the name Newrez carry on and not Caliber?
Caliber is still around but it might turn into newrez at some point
Are you me?! I bought in 2020 with Caliber as well. Switched to Newrez last year. Newrez has been fine thus far. I’m hoping my loan doesn’t get sold/serviced by anyone else going forward.
Did your credit take a hit as well? When Newrez acquired my loan from Caliber, my credit score dropped by like 150 pts. 😳😐 I was so pissed. No say in the acquisition, yet *my* credit takes the hit? Ugh. Thankfully, it was only temporary, and it went back up within ~45-60 days. But still. Very unsettling thing to wake up to.
Why were you pissed? Was there a loan you were trying to get and were unable to?
No, thankfully I didn't have any major purchases going on at the time that needed any credit involvement, but it was still just frustrating, even if just temporarily.
Haha, fortunately no credit hit here. Glad you’re back on track though.
Good to know. Thanks.
For what it's worth, I've had no problems with Mr. Cooper, and I think their online UI is pretty slick. My first mortgage was sold to them back when they were still Nationstar, and I find the name in general somewhat amusing, can't help but always think of that show Hangin' with Mr. Cooper. My second mortgage was sold to them within a month of closing. I think of it like buying/selling mortgages is to banks what buying/selling stocks is to an average person, there's probably the numbers to back it up, but it's not going to make sense to only look at one or two transactions at any given slice of time.
Mr Cooper sounds like something you name a cat, not a mortgage servicing company. I never had a mortgage serviced by them but I too find the name amusing.
I called USAA because I had Nationstar and it was sold to Mr Cooper. I called them and told them that it sounded like a scam and they assured me it wasn't. And I said what the hell kind of name is Mr Cooper for a mortgage company? It sounds really sketchy and you all need to tell your clients that it is legit.
Hangin' with Mr. Cooper is where they got the name - some focus groups loved it for some reason. I worked there when the name was announced to the staff and the expressions were priceless.
I always wondered about the employee reactions. I worked in Secondary for a lender that sold loans to Nationstar and we could not believe the name change was serious. We had so many borrowers and originators reaching out to our Servicing dept when they got their goodbye letters because they thought it was a scam. Our Mr Cooper AE told us how much was spent on the marketing firm for the rebranding. I don’t remember the number but I remember being shocked at how much it was.
I also had my first mortgage by nationstar back in 2015, then it sold to Mr. Cooper. I refinanced in 2021 to a 15yr 2% and then it just sold again this year to Roundpoint. Both Mr Cooper and Roundpoint were easy enough to pay online so no complaints yet!
So there are two parts of a mortgage. The actual mortgage and then a thing called the servicing right. The servicing right is the right to collect payments from you. That right is worth about .25% of the principal balance. The servicer keeps that money and sends the rest to the people who actually own your mortgage. Servicing rights are sold all the time. Sometimes Mr Cooper just wants cash now. Sometimes someone offers them more money then they think they will get (ie if they estimate you’ll refi in a year but a buyer pays cash now for 1.5 years of payments). Your servicing right is just part of a big bundle. Each buyer wants specific things in the portfolio they buy. If you don’t want this to happen you have to work with banks that promise not to sell the servicing although usually they won’t put that into a contract.
Your post is extremely will written and easy to read. If you don’t mind, can you answer one more question? Who “owns” the mortgage than? The original company who gave you your mortgage?
Virtually never. The mortgage part (the loan) is sold to investors they ‘own’ your mortgage. For example in the U.S. a lot of insurance companies are mostly only allowed to invest in mortgage or treasury bonds. But they don’t want anything to do with actually dealing with customers so they have the servicer handle all that. This can create a mess if you default. Since the servicer doesn’t own your mortgage and since it might be some big institution(s) it can be hard to get approval to make unique arrangements with you.
It has nothing to do with you. Banks buy sell and trade mortgages, that is basically what they do. Of Citibank sold your mortgage it was probably just because they were dumping lower interest mortgages in favor of funding higher interest mortgages from the payout they got from selling the mortgage to another bank or company who likely got to buy it at a bit of a discount to pad out their own collection. If anything making every payment would make your mortgage easier to sell. I imagine a bank would struggle to sell a mortgage that was not in good standing. Banks can do it because it is their mortgage so they can sell it at anytime as they see fit without your permission.
Have you googled the companies? Mr. Cooper is nationstar mortgage, just rebranded. They're one of the biggest (if not the biggest) mortgage servicers in the US. If they just sold your mortgage, be sure that the new company has your insurance docs on hand. That can fall through the cracks during a transfer of mortgage ownership. If they don't have it, you'll likely get a notice telling you that they'll increase your payments to buy insurance for you.
Always a good idea to check in with your insurance provider, to make sure they have the latest mortgage info in your policy doc.
NewRez has been sending letters to new clients asking for proof of 'hazard insurance' (not a thing in NYC with coop apartments, and it looks like they did get a lot of loans originated by Citi). Turns out they just mean homeowner's insurance and will take existing proof of coverage.
Mine was sold thrice in 5 yra. Recently newrez sold it to someone else. Newrez is legit company, don't worry.
Mr Cooper is a very large and credible financial institution. Newrez is also legit.
First of all… banks trade mortgages like a five year old trades Pokemon. They just do it because that’s what you do. There’s an entire section of you bank with employees who are paid to do this and they pretty much just have to justify their existence. Secondly… why are you paying extra on your mortgage. Why would you pay off a 2% mortgage instead of making 6-8% from a dividend paying stock? You’re leaving money on the table. Now, I’m not gonna tell you what to do, you sound as if you live comfortably. But the wealthy get rich by making money off of taking out 5% loans millions at a time and using that money to make 8% gains. And never have to pay taxes on it!
It is how business works. We look at homes as places for families and our friends. Banks and lenders look ar us as numbers on a p/l statement. Don't take it personally, Think of yourself as a professional sports athlete who's just been traded.
Happened to me twice with mine prior to my last refi. At one time I was with Loan Depot, which I thought sounded pretty sketch, but IDK, Mr. Cooper and Newrez might be worse LOL. Luckily they can be named anything and it doesn't really matter if you make your payments. :)
Is it a requirement to have a sketchy name when opening a mortgage servicing company?
I work for one of the major property tax firms that loan servicers hire to handle the tax side of things. I manage and interact with around 20 different servicers. They all have sketchy names. No idea why.
I’ve dealt with Newrez at my job and I’ve had zero issues with with.
We have Newrez. No issues with them since we did a refi in 2019
You've never seen The Big Short I take it?
Mine got sold 3 times in the first 3 years. I eventually refinanced with a credit union and they don’t sell it. I wasn’t specifically looking for that but they had a great rate.
Your loan servicer changed. Likely not who holds your mortgage, yes it happens Your mortgage likely got sliced and diced up into MBSs long ago, only servicing rights involved not sale or mortgage
Same thing just happened to me. My mortgage got sold off to another company, a month after closing. Discover gave me a heads up that another account was opened up, which was just my mortgage under a new company. Should I be concerned that this will affect my credit score?
You’ve gotten a lot of good answers here. Just to reassure you- both Mr Cooper & NewRez have been around for awhile. Both companies have purchased and/or merged with other companies. For example- NewRez has purchased Ditech, PHH and Caliber Funding in the last 5 years.
Just an fyi Mr Cooper used to be Nationstar Holdings which had been fined multiple times due to improper foreclosures and payments handlings.
The reason you’ve heard of Citibank and not the other two is that Citibank spends zillions in advertising and the others don’t. (Among other costs.) You pay that cost in a higher interest rate. Cheaploanz the buys those loans, and since they don’t have advertising costs , etc. they can buy them at a lower rate.
I was part of that package mr copper sold me to newrez they aint that bad to deal with
NewRez is in the same corporate family as Mr Cooper (wtf with the name????). Most likely just a corporate accounting reshuffling
How did you refinance without closing costs?
It was an offer from Citibank.
>closing costs Usually what happens is the lender hides the closing costs in the loan amount. Its not that there is no closing costs. There are just no immediate out of pocket costs.
Mr. Cooper used to be Nationstar. They rebranded themselves. They’re actually one of the largest mortgage servicers in the country and one I see the most often in my line of work. Newrez falls under Caliber and Shellpoint. All big legit companies. Kinda like how Quicken pulled a “Rocket Mortgage” to seem cooler. No large mortgage company will really ever hold your loan forever unless you fall into a specific platform in their portfolio. They will sell your loan to make room for more buying power.
If I owe you $1000 and I agree to pay you $100 a month for 12 month for total of $1200. Someone comes along and says they will give you $1100 today you cash out and can loan the money again..
There are a million moving parts to a mortgage loan. The guy/ woman you sat across the table from and spilled your life to is just the tip of the iceberg. That person charges you a 1% fee for origination. It costs about 0.75% for credit report, appraisal, inspection, etc. After closing they put your loan together with 1,000 others and sell them. They get about 1-2% for that. They are then packaged and sold to a federal agency, who in turn resells them as a mortgage backed security. And of course every step of the way, everybody sucks some of the vigorish out. Fast forward 6 weeks and you send your first of many payments to somebody you were directed to mail it to. That is the servicer. And guess what? He sucks out 1% of the principal and sends the rest to the actual owner of the loan. Remember the Federal Agency? And there can be still another guy involved who actually is responsible for holding the physical documents (note and deed of trust). This is not the servicer but he does get paid of course. I and the people who worked for me once had to review about 100,000 of these in a banks vault to make sure they are there. That was boring. TLDR the people you send your check to probably are just the servicer of the loan, not the owner.
I hate this! We’ve had a mortgage for almost 30 years, 10 with the last company (did a huge renovation that adds 700 sf and another 10years. Yet the “10years” (and 20 with the other company) count as 3 years on my credit report because it’s been sold so many times! So my only “risk” or negative on my credit report is that I don’t have any long debt payments.
[https://app.joinhandshake.com/employers/newrez-caliber-and-shellpoint-160946](https://app.joinhandshake.com/employers/newrez-caliber-and-shellpoint-160946) What does Newrez gain by purchasing a loan like mine? They get a loan they don't need to pay out on very much, so thats nice. Your loan wasn't cherry picked. It was sold as part of a package by Mr.Cooper to Newrez. Buying your loan makes them bigger and in finance bigger is better.
Mortgages are simple loans. Most of the interest is being paid in the beginning. XYZ bank originated your loan and took all the interest payments with very little principle paid for themselves. After two or three years they sell it to ABC bank, they then take the interest payments and payoff a little more principle. ABC bank found another bank to unload the loan to, now Newrez bank is stuck with your low interest payment loan. I doubt they find a buyer.
The age of a mortgage doesn't matter. If someone has a $300,000 mortgage at 6% interest, he's paying $1,500/month in interest. If his mortgage is down to $30,000, but his mortgage is sold as a bundle of 10 mortgages all with $30,000 left at 6% interest, the new servicer picks up $300,000 in principal, with $1,500/month in interest
I want to edit a loan agreement to say “if the loan gets sold the balance becomes $0” and then sign and return. Kind of like that guy who wrote in the credit card agreement that the credit card company owes him and he signed it and the credit card signed it and the court found the contact legit and the credit card company had to pay the man.
Mr. Cooper is a big mortgage firm. I guess they are losing money on you and so sold off your mortgage to somebody else. Why does it bother you? You should just keep paying the mortgage
They are legitimate company, but I dislike them. If you pay on time, check regularly and make sure you read mail or login monthly to avoid mistakes. You should set up payment notifications, etc. I have a couple properties with Newrez mortgages. They buy a lot of mortgages. I personally feel they are a bad servicer, but I am biased. They are a legitimate company however eve if they have poor reviews. It's not like anyone takes time to post a positive servicer review, so I'm guessing most have poor reviews. 1. get online access, 2. watch carefully 3. make sure taxes and insurance are covered and that payments are correctly applied and cover any loan adjustments. 4. I had auto payments initiated from bank. They may auto adjust if they initiate the pull, but this has other risks. I had auto payments and when taxes increased they my payment didn't adjust automatically (not sure why) other lenders / services do this for me. So I was $25 short for about two months before I noticed. I called them, paid over phone and the agent said no problem won't hurt my credit. He said they should have applied my mortgage payment to mortgage balance first and not to taxes and it wouldn't have caused the issue. Of course their were fees too. ...Then the accidentally transcribed my loan number as my payment method (instead of my bank account number), causing a draft rejection and about a $30 fee. I didn't know this until I got the letter and was another month late causing my credit to drop 150 points now showing like 60 (or 90? days late). I had to fight, ask for recordings of phone calls to be reviewed, demand a manager, write a letter, etc.. It was me who recognized they attempted to draft my loan number and not my bank account number. They acted as if I tried to swindle them and was a bad person. It took about two years to get back to an 800 credit score. I'm still down about 20 points. I eventually got the fee dropped but the mark is still on my credit. So watch carefully and you will be fine. At end of the day I am responsible for paying the right amount on time. They suck but I made mistakes by not closely paying attention. Did I mention I hate Newrez?
I’m on my third mortgage company in a year… just keep getting letters..
We purposely didn’t use Chase for our last mortgage only for our mortgage to be sold 15 days after the closing to Chase.
Citi sold my mortgage before I even closed, I found out at the title company during signing.
When your mortgage gets sold and you have your taxes and insurance paid through you mortgage payment, make sure the new company is paying those extra items. It doesn't happen often, but there are cases of taxes in particular not getting paid for years. It can all be straightened out, but it's messy and time consuming. It happened to my buddy which is why I have always paid my taxes and home owners insurance separately.
You’ve gotten a lot of good answers. I have a question for you. Why would you pay extra on a loan that’s locked in at 2% interest when you could put that money into HYSA and get over 4%? Or max out a tax advantaged retirement account or buy bonds or cds or any number of investments that would far outpace that 2% return?
Great question. A simple money market gets you 4% these days.
It’s pretty common for mortgages to be assigned to new mortgage companies. Sometimes it’s just a change in loan servicer. It should not affect you other than where you send your payments.
That’s interesting. My mortgage was sold to Wells Fargo from a local bank the day we closed on the house. That was 4 years ago. Wells Fargo just sold our mortgage to Mr Cooper last week and I had never heard of them either
we've been in our house for a little over 2 years and we're on our third mortgage company. they just do whatever they want.
Mortgage backed securities. 2008.
Mr. Cooper and Newrez are Independent Mortgage Brokers (IBMs) with separate "sister" companies that handle the servicing for their own originations and other smaller IBMs. I used to work in the compliance department for Newrez’s sister company a few years ago. I also worked for another company that sold MSRs, handled compliance audits for various banks or investors and whole loan trading. Mortgages are collateralized debt that get traded regularly amongst other banks, hedge funds, sovereign wealth funds and other institutional investors.
Mine got sold to Newrez as well, and honestly, I like them. Mind you, I haven’t had issues, knock on wood, but I think the user interface is nice, their website hold a lot of information and data I like, it’s easy to add extra principal if you want, (I do $250 per month, giving me a 13th payment a year) and then the tables show that well. Overall I like them.
Why are you paying extra on a 2% mortgage when HYSA interest rates are double that?
My loan has gone to Newrez as well
I closed on my house in November 2022. My mortgage has been sold twice to different servicers in just over 6 months. That's the business. Understand that mortgages are not sold individually, but in bundles. When it was sold, your loan was heaped in with a ton of other loans. Companies buy and sell bundles of mortgages for all kinds of reasons, but the most common reason is to balance their portfolios.
That happened on our first house was never quite sure who to send payment too. The mortgage was sold 6 times in 10 years. When we bought out next home we dealt with local Saving and Loan. Have bought 2 houses and remortgage 3 times in 25 years with this company and they don’t sell their mortgages. Plus dealing local they would call us if it was advantageous to refinance the mortgage. Few in the industry would do that!
Your loan likely was sold, but not to NewRez. It services loans, but doesn’t purchase them. NewRez is a big player in the servicing industry; surprised you haven’t heard of them.
Also, the deed of trust you executed in connection with the loan says the loan can be sold or servicing transferred, without your consent. It honestly shouldn’t have any effect on you so long as you pay back the loan.
Heres the reason: The bank that bought it may be making much more than 2%. The way that these mortgages work when sold is that there is a value of the mortgage that will be paid back but then the actual value of the mortgage as a security. They aren’t the same. There is a good chance that Mr. Cooper took a big loss on your mortgage and sold it to get it off their books. They probably sold it for well under 70k as no investor would accept only 2% today. So… probably, it was sold at a 5-7% yield with some adjustment for the risk you’ll pay it off early and the new buyer won’t get the interest. Even though the actual mortgage note may be yielding an equivalent 5-7% due to a change in value, you still pay just 2% and never see all that on the backend. I’m not going to do the math on it, but at 2% your loan was initially worth 70K to Mr Cooper. Now at 7 percent equivalent yield it may only be worth buying for something like 60K.
Happened to me twice over 7 years. Quite normal.
Dude, identical situation as me. At first I thought it was a scam given the name. But nope says so in mr cooper portal
It is sold off to generate more capital. As such, they can make more new loans to make additional profit