There may have been a clause in the contract that made it legal for the new loan owner to raise the rate. That would have made it more attractive to prospective buyers. In the end it’s always the homeowner that gets screwed.
MY loan on my 2nd house was sold-—but the payment didn’t change even a penny.
ONLY problem I had was that I was NOT notified & no new coupons were sent to me....or any new payee or address.
I got a call from the NEW Loan holder that I was 3 months delinquent & they were going to foreclose.
I sent them copies of my check payments & told them that mortgage holder #1 had the payments & that I was NEVER notified of any changes as to who I was to write/send the checks to. They had to get the $$$$$ from the mortgage company I had sent it to. I didn’t have any intent to make double payments-—THEY could fight it out..Was done without my input.
I have done accounting/bookkeeping since age 17 in 1957 & this was about 1995. At least I could talk the correct language to them....and ask the right questions.
The “Late Payment” fees were dropped & I got correct payment coupons & addresses rather quickly.
BUT I made it abundantly clear that I had done MY part correctly-—IF they were going to buy existing mortgages-—they needed to notify the loan holder in better fashion.
I got more than a little salty about it, also.
One lady got a bit smart ass with me about my language & I told her-—YOU are the one dinging MY CREDIT REPORT-——which lasts FOREVER-—I WILL GET EVEN NASTIER IF YOU DON’T CORRECT THIS RIGHT NOW-—OR EVEN YESTERDAY!!!!!!!
That’s why you don’t get gimmick loans. 15 or 30 year fixed rate only