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A question often asked after closing is “who am I going to make my payments to?”. Followed by “can I set up autopay right away?” These are fair questions asked by diligent borrowers who want to “close the loop” on the origination process of the new loan. Unfortunately, there is not a quick or immediate answer because of the way mortgage loans are originated for sale into the financial system.
Remember that you jump all the hoops to get a loan:
- Submitting your taxes and W2s for the last 2 years.
- Providing at least a month of pay statements.
- Letting your lender review all your financial accounts.
- Making sure the property is insured.
- Confirming the value of your property via an appraisal.
There are hundreds of data points that get confirmed and reconfirmed before you are allowed to go to closing. Once that is done, you’ve signed and the money has changed hands, your mortgage becomes a financial instrument in a HUGE mortgage origination system that created literally $1.7 Trillion in new loans in 2024. The closing/signing ends the origination process for the borrower but there are a few more things on the conveyor belt of mortgage origination that happen after your closing.
First, your originating lender has to package it for sale. That includes a post closing review, occasionally a full audit of the work the originating team did. Then the originating company’s secondary market department decides what servicing company to sell and transfer your loan to.
As part of that process, they have to send all the loan documents to that servicer for their review. They may sell your loan individually or in a pool with dozens, hundreds of other loans or more at one time. The acquiring lender reserves the right to audit your loan. However the bigger bundles are likely only spot checked, but that process has to play out.
Once that investor agrees to take your loan, whatever the details of that process look like then you need to be notified. That, in a nutshell, requires that BOTH the originating lender selling your loan and the servicing lender who is buying it notify you by snail mail. That is for your consumer protection. They also may email you.
After the transfer is complete, then you set up autopay. But that could be anywhere from a few days to a month after you actually sat and signed your closing documents as the above process needs to play out.
