Mortgage Servicers

After you have closed on your home and your mortgage is in place and ready to go, it could be sold to a mortgage servicer.

This is not a bad thing, and it actually happens quite frequently, but like anything else in the home buying process, you should know what this means before you go into a mortgage contract.

Covering all of your bases, and being as informed as you could possibly be about the mortgage process will make it so you are not an easy target for people looking to scam others.

The article, “When your mortgage is sold to a mortgage servicer,” posted on Bankrate.com on May 1, 2006, gives some basic information on mortgage 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.”

Mortgage servicers perform a wide variety of tasks. They can be very helpful in counseling you on your mortgage and helping you to understand things a lot easier.

Some of the duties of the mortgage servicer are to, collect and process you monthly mortgage payments.

They also forward the payments that you make to the investor who owns the loan. The servicer basically acts as an ambassador on the investor’s behalf. If any problems were to ever occur with the loan, the servicer would come to you on behalf of the investor.

They are also a great option to help you if you are having trouble with your monthly payments.

They can, “Counsel and assist you to overcome delinquencies if you miss loan payments. For instance, a forbearance, or deferral of principal and interest payments, may be extended to help you out of financial difficulties. If the loan becomes seriously in default, foreclosure might be necessary to protect the investor's interest in the property and salvage the borrower's equity, if any.”

If your mortgage servicer changes, there are a couple of things to keep in mind; such as rules and regulations that they must follow.

Basically, you must be notified of all changes in writing and any disputes you have must be looked into.

“You must be notified in writing of the change by both your original servicer and the new one, noting the date of transfer and contact information of the new servicer. The new servicer must honor the terms and conditions of your original mortgage agreement, with the exception of those directly related to servicing the loan.”

Once again, if your mortgage servicer changes, there is no need to panic, you just need to stay informed as to what is going on.

“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.”

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