Why Your Lender Sold Your Mortgage

A lender may sell a mortgage to another financial institution for several reasons, primarily to free up capital and reduce risk. When lenders originate home loans, they often sell them to investors or entities like Fannie Mae or Freddie Mac to replenish funds and continue issuing new mortgage loans. Selling mortgages also helps lenders manage liquidity, reduce exposure to interest rate risks, and maintain compliance with banking regulations.

Additionally, some mortgages are bundled into mortgage-backed securities (MBS) and sold to investors, providing a stable return. If your home loan is sold, your terms remain the same, but you may need to make payments to a new loan servicer.