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Re-financing, sold to new company, cashing in of points?

Client re-financed home in February. The mortgage company immediately sold the paper to another company. Now, I'm aware that the conventional answer is that this is not a new mortgage, it's just selling the paper, BUT . . . advocating for the client, trying to find a way. They are making the mortgage payments to a new company.

Is the IRS really this clear on this?

-Tiger

========================================= MODERATOR'S COMMENT:

- This is very common. What exactly is the concern? The bank that wrote the mortgage sents the homeowner an alert regarding the servicing transfer, and the new servicing company sends a hello letter.

Reply to
Personable Tiger
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It is not a new financing by the taxpayer and therefore there is no "cashing in of points."

Reply to
Alan

What does that expression mean? A new mortgage when buying a home allows one to write off the points. A refinance must be spread out over the life of the loan. The reassignment of the servicing is meaningless. It has no impact to the mortgage holder other than he send his payment to a new address.

He may not take the points at once unless he sells the home or refinances again.

Joe

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Reply to
joetaxpayer

I believe he was alluding to paying points on a mortgage that he was amortizing and wanted to know if the lender sold the note, would that be considered a refinancing so he could write off the points.

Reply to
Alan

Right, that's what I assumed you meant, and answered above. It's 'no'. The servicing change is more than routine, most mortgages are sold into the secondary market and/or serviced by a third party. Joe

Reply to
joetaxpayer

Per law, it's not a new mortgage. Proof: You didn't pay a mortgage recording tax, did you?

Seth

Reply to
Seth

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