JPMorgan Is Buying $2B in Single-Family Mortgages. Here's What Happens if You Get a New Lender

When Silicon Valley Bank collapsed earlier this year, there was a lot of panic that more banks would follow. While there hasn't been the mass implosion some may have feared, there has been a lot of motion in the banking industry.

For instance, as a part of the major merger between PacWest and Banc of California, JPMorgan is picking up nearly $2 billion in residential mortgage loans (and reports indicate the banking giant is getting them at a bargain). It's unclear so far whether JPMorgan plans to keep the loans, or to turn around and sell them -- potentially for a profit.

That $1.8 billion in loans represents a lot of homeowners. But it's hard to say exactly what will change for them. Mortgages (and other debts) actually get bought and sold fairly often. Sometimes, the only indication that something has changed may be a letter in the mail. Other times, you may get a whole new servicer.

Mortgage owner vs. mortgage servicer

Your mortgage loan may be owned and serviced by the same bank. This isn't always the case, however. It's not unusual to have a mortgage loan that is serviced by one bank and owned by another.

Mortgage lender/owner: This is the financial institution that owns the debt associated with your mortgage. It could be your original lender, or it could be another lender that purchased the debt.

Mortgage servicer: This is the financial institution that services your loan. It does things like collect payments, manage your escrow account, and respond to customer service inquiries.

The servicing right may be sold with your loan -- but it may not. In other words, your lender could change while your servicer stays the same. This would mean nothing much would change; you'd still pay and manage your loan the same way you did before the sale.

On the other hand, if the servicing rights are sold, how and where you make payments could change. Be sure to set up any necessary online accounts or finish other important preparations well before your next mortgage payment is due to ensure you don't miss any payments. (You have a 60-day grace period if you send a payment to the older servicer by mistake.)

Your loan terms will not change

No matter how many times your mortgage is sold, your loan terms won't change. Your monthly payment amount, interest rate, and other details will all stay the same.

Lenders must provide notice of sale

If your mortgage is sold, your lender is required to notify you by mail within 30 days of the date of transfer. The notice should include the name, address, and telephone number of the financial institution that purchased your loan, as well as who to contact about payments or concerns.

Although the banks have to notify you about the sale, that's the extent of your involvement. You don't have any control over the sale of your loan, be it the debt or the servicing rights -- and there's nothing you can do about it after the fact, either.

How to find your servicer or lender

If your loan was sold but you don't have the notice, you can contact your servicer to find out who currently owns your loan. Folks who pay their mortgages online may be able to find the information through their online account (or mobile app), or by emailing their servicer. Otherwise, you may need to call.

The contact information for your servicer should be on its website. However, you can also find it on your monthly mortgage statement or coupon book.

When all else fails and you don't know who is servicing your loan, you can try the MERS® Servicer Identification System. This is a third-party company that maintains mortgage information and your servicer may be listed in their system:

• By phone (toll free): (888) 679-6377
• Online: MERS® Servicer ID

The only way to avoid having your mortgage sold is to choose a lender that doesn't sell their loans in the first place. You can find out if the bank has a habit of selling loans by asking before you apply.

If your loan is sold, however, remember that it's not the end of the world. Your terms won't change. And, unless the servicing rights are sold, neither will how you make your payments. In either case, you'll be notified by mail about any changes.