What action is required from a lender when a loan is sold on the secondary market?

When a loan is sold on the secondary market, the lender is required to notify the borrower as it is an important change in the status of the loan that affects the borrower's payment obligations. This notification is crucial for ensuring that the borrower is aware of who will be servicing the loan and where to send future payments. It maintains transparency in the lending process and upholds the borrower’s rights, ensuring they understand the implications of the sale on their mortgage.

In contrast, holding a meeting with all stakeholders may not be necessary as the transaction is typically handled administratively without requiring direct involvement from the borrower. Reverting the loan to the original lender is not a standard practice in secondary market transactions, as the purpose of selling is often to free up capital for the lender to make additional loans, rather than recalling sold loans. Increasing the interest rate for the borrower as a result of a sale is not a requirement and would be considered an unethical practice unless the terms of the loan explicitly allow for such actions under certain conditions, which would be rare and typically against consumer protection regulations.