After Your Loan Closes
Nations Lending is an expert when it comes to funding and closing your loan. Our loan officers work with real estate agents, escrow & title officers, inspectors, and everyone else involved in helping you finance your home. But what happens after your loan closes? Where do your monthly payments go? And rest assured – we’re here for you.
If you think about it, after your loan closes with Nations Lending, it is like a bond, like those issued by the U.S. Government through the Treasury. The U.S. issues T-bills, notes, or bonds, that pay interest. Anyone in the world can buy securities issued by the U.S. Government, and when interest payments are made, they are electronically transferred into the bank accounts of the holder.
When you take out a mortgage, someone (usually some financial institution) “holds” that mortgage. That is, they’re the lender and you must pay them back. Nowadays it’s not always obvious who holds your mortgage, as it may have been sold to someone else, much like a Treasury bond can be sold. The composition of mortgage holders has changed over time. Initially, it was mostly banks—but also some individuals and, to a small degree, also the government. So, your monthly payment might go to Bank of America, Flagstar, or Chase, or wherever.
Gradually, mortgage pools and trusts have taken over—that is, companies that specialize in the pooling of similar mortgages that can then be sold as securities. Thus, the so-called securitization of mortgages. But many were not stable, and the government took over a large portion of their portfolios in 2010 to stabilize the mortgage and real estate markets. Fortunately, things have steadied.
At Nations Lending we remind our clients that although you are closing your loan with us, and that we will collect your initial payment or two, your loan may be sold, and the servicing transferred, to Fannie Mae, Freddie Mac, or a company that invests in mortgages. We also remind our clients that we will always be there for your refinance needs or future questions.