June 2, 2015 in Mortgages

What does a mortgage servicer do, and what happens when I get a new one?

The mortgage servicer is the company that collects your monthly payments. That company is not necessarily the lender that made the loan.

When the servicer receives your payment, it distributes the money:

Other duties of the servicer

Besides collecting payments and distributing the money, the servicer:

When there’s a change of servicers

At closing, your lender must inform you of any plans to turn over the rights to administer your loan to a mortgage servicer, as often happens when a mortgage is sold. The new servicer could be another lender, a bank, an investor or a third-party processing company that specializes in servicing mortgages. Over the term of your loan, you may have several mortgage servicers.

Rules of servicer changes

Be careful if the servicer is changed

After your mortgage servicer has changed, carefully examine your mortgage statements, making sure all payments have been recorded and taxes and insurance premiums have been paid on time. Retain copies of letters, canceled checks and other paperwork relating to your mortgage and payments in case you need to document any dispute.