Purchasing a home is one of the largest investments people make. Most people give careful consideration when choosing a lender. The problem is that current laws allow lenders to sell mortgages to other lenders, with no consideration to the homeowner. Homeowners are not given notice prior to their current lender selling their mortgage to another lender. Therefore, homeowners are not given a choice in choosing the lender that buys their mortgage. Not all lenders are equal. In fact some lenders use unethical business practices.
Lenders selling mortgages has become a common business practice. Lenders sell mortgages for two main reasons: 1) To make money, usually in the form of a commission; 2) Free up capital to make more investments. While this practice is beneficial for lenders, it's seldom beneficial for homeowners, and can put homeowners at risk if their mortgage is sold to a lender who engages in predatory lending. Currently, there are no laws to protect homeowners from having their mortgages sold to predatory lenders, putting home owners at risk especially with those that their primary business is flipping homes.
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