Some loans are sold and you, the consumer may not be aware of it. Some of the larger lenders sell the loan on the secondary market but still service it for a fee.

At closing you sign a form called a Servicing Disclosure. This is the form that describes and guarantees that none of the terms of your loan can change. Normally if/when your loan gets sold to another lender for servicing you will receive written notification from both the old lender you were making payments to and the new lender who you will be making payments to.

When a bank sells your loan to another bank make certain to hold onto the documents they send you that outline the new "assignment." In future financing transactions, lenders often look for proof of this transfer.

When a lender sells the servicing rights to your account (who you make your payments to each month) the original terms of your mortgage note always remain the same. So the interest rate, payment amount, type of loan (fixed rate or ARM), etc cannot change simply because your loan has been sold.

95% of all lenders are just in business to sell loans. They do not have the capacity to service your loan i.e staff and locations. So they simply obtain the loan and then sell it to a bank or other lender that can service the loan.

Mortgage loans are front packed with interest. It is the future interest payments that investors want. The rights to these payments are what makes your loan keep getting sold over and over. Someone who has been in there loan for a long time rarely sees there mortgage sold again. This is because after they have paid the interst off there is no longer profit for investors. This makes the loan less valuable and thus not one purchase.

Loans are sold on the secondary market to free up money in the primary market. In a nutshell, the primary market are the lenders that provide mortgage loans for you initially and the secondary market is who your loan is sold or transferred to after the mortgage loan has been originated. The secondary market frees up money from the primary market lenders so that they have enough money to keep lending to consumers looking for mortgages. This is a good thing. Since the terms of your loan cannot change and the only thing that can change is who you make your check out to each month, it should not affect you too much.