What is a double sold loan?

A double sold loan refers to a primary mortgage that is sold to two different investors on the secondary market. This practice typically arises when a lender sells the same mortgage note to more than one investor, often without appropriate disclosure. The implications of double selling a loan can be significant, as it can lead to conflicts regarding ownership and the servicing of the loan. In this case, both investors may believe they own the same mortgage, which can result in legal complications or financial losses.

Other scenarios presented in the options do not accurately define what a double sold loan is. A loan sold to multiple lenders without disclosure suggests unethical sales practices and doesn't correctly reflect the nature of a double sold loan, which focuses on that specific instance of simultaneous sale to two investors. A loan that has been refinanced twice relates to the refinancing process rather than ownership of a mortgage. Similarly, a mortgage that has been prepaid in full indicates that the borrower has paid off their loan entirely, which also does not correlate with the concept of double-selling a mortgage.