What is a Mortgage Servicer?

What is a Mortgage Servicer?

July 24th, 2019 | Conventional Loans

You recently closed on your mortgage loan and have been making your payments to your lender. Then one day, you get a letter in the mail informing you that your loan has been sold and you have a new mortgage servicer taking care of your loan. What does this mean and how does it affect your mortgage? Here’s what you need to know about mortgage servicers:

It is very common for your lender to sell your loan soon after originating it. Many lenders and brokers do not have enough reserves to keep mortgage loans on their books. Instead they sell them to investors or government-backed enterprises like Fannie Mae and Freddie Mac, who usually take many mortgage loans and package them together to be resold to other investors. Those investors pay mortgage servicers to be the caretakers of those loans, who handle the administrative details such as receiving payments and managing the escrow accounts. A mortgage servicer works for your lender or investor who owns your home loan. If the investor decides to go with another company or again sells your loan, it is possible that you could have several mortgage servicers over the course of your loan.

How Things Change

When your loan is assigned to a new mortgage servicer, your former servicer (sometimes your original lender) must notify you in writing of the change. You will start sending your mortgage payments to the new address as of the given date. If there are any changes to the terms of your homeowner’s insurance, you will also receive notice. The transfer time frame will include a 60-day grace period with no late fees if you accidentally send your mortgage payment to your previous servicer. What will not change are the terms and conditions of your original loan. That means your interest rate, APR, loan length and monthly payment should all stay the same.

Mortgage Servicer Responsibilities

Your loan servicer is responsible for receiving your mortgage payment and parceling it out to the appropriate parties. This includes sending the principal and interest to the owner of your loan, sending taxes to the government, home insurance premiums to the insurance company, and mortgage insurance premiums to the mortgage insurance firm. If there are homeowner’s association fees attached to your home loan, the servicer will also take care of those.

Working with Your Servicer

Ideally, your relationship with your servicer should be simple and hassle-free. If issues do arise, you can send your concerns or disputes in writing to the servicer (while continuing to make payments) and within 60 business days your servicer is required by law to investigate and resolve any errors.

Unfortunately, borrowers have almost no control over who services their mortgages. The only way to guarantee a certain servicer is to take out your original loan (or refinance) with a company that retains the servicing themselves or that does not sell its mortgage loans. These are rare, however. If you have a major dispute with your mortgage servicer, you can file a complaint with the Consumer Finance Protection Bureau ( which oversees the business practices of banks and lenders.

If you are unsure who services your mortgage, you can look at your home loan statement or contact your original lender.

If you're not happy with your current mortgage servicer, please give us a call today at 630-519-5955 and we can help you refinance your loan which could change your mortgage servicer.


Leave a Comment

Contact Us

Not readable? Change text.


Required Documents

VA Loans

Veteran Loans

Prime 1 Bancorp, Ltd is not affiliated with any government organization or bank nor do we act on behalf of the FHA or VA. This material is not from HUD or FHA and has not been approved by HUD or a government agency. We are not a Federally chartered or State Chartered Bank. We are an we are an Illinois Residential Mortgage Licensee by the Office of Banks and Real Estate License #MB.6761138, a Colorado Registered Mortgage Brokerage by Division of Real Estate, a Florida Residential Mortgage Brokerage Licensed by the Office of Financial Regulation License #MBR1930 dba Prime 1 Mortgage Inc, a California CFL Licensed Mortgage Brokerage by Department of Business Oversights 60DB055973 and a Texas SML Licensed Mortgage Brokerage by the Texas Department of Savings and Mortgage Lending. Prime 1 Bancorp, LTD Corporate Office is located at 2720 S. River Rd Suite 50, Des Plaines, IL 60018 our Toll Free Number is 888-205-3737. NMLS: 1434638

Loan product availability is subject to qualification of the borrower and loan approval after full review of the file. Not every applicant qualifies or is eligible for every loan program. Some loan products may not be available in all states. Loan approval, note rate and annual percentage rate are dependent on factors including, but not limited to, credit, collateral, income, assets and overall financial history. Not all applicants will be approved for a loan. All loan programs, terms and annual interest rates are subject to change without notice. NMLS: 1434638