Getting a mortgage is often associated with the lender or mortgage professional who helps you finance your home.
But after your loan closes, you may eventually interact with a different company when making your monthly payments or managing your mortgage account.
That company may be your mortgage servicer.
Understanding what a mortgage servicer does can help homeowners know where to send payments, who to contact with questions, and what to expect if their mortgage is transferred to another company.
What Is a Mortgage Servicer?
A mortgage servicer is the company responsible for handling the day-to-day administration of your mortgage after the loan is originated.
The servicer may collect your monthly mortgage payments, maintain your account records, manage escrow payments, and communicate important information about your loan.
The company that originally helped you obtain your mortgage is not necessarily the company that services the loan for its entire life.
This distinction can sometimes confuse homeowners, especially when the name on their mortgage statements changes.
What Does a Mortgage Servicer Do?
Mortgage servicing involves many of the administrative responsibilities associated with maintaining a mortgage.
A servicer may handle:
- Collecting monthly mortgage payments
- Maintaining mortgage account records
- Managing escrow accounts
- Providing payment information
- Sending mortgage statements
- Tracking principal and interest payments
- Handling certain payoff requests
- Communicating changes to the mortgage account
- Managing certain borrower assistance requests
Your mortgage servicer is generally the company you deal with for many routine questions about your existing mortgage.
Is a Mortgage Servicer the Same as a Mortgage Lender?
Not necessarily.
A mortgage lender is involved in originating and funding the mortgage.
A mortgage servicer handles the ongoing administration of the loan after closing.
In some cases, the same company can perform both functions.
In other situations, a mortgage may be originated by one company and serviced by another.
For example, you could work with a mortgage professional to obtain your home loan and later receive monthly statements from a different company responsible for servicing the mortgage.
Why Would a Mortgage Be Transferred to Another Servicer?
Mortgage servicing can be transferred from one company to another.
This can happen for business or operational reasons and does not necessarily mean there is anything wrong with the borrower’s mortgage.
If your servicing is transferred, you should receive information explaining the change and providing instructions for making future payments.
The most important thing is to carefully review the transfer information so you know where and how to make your next mortgage payment.
What Happens When Your Mortgage Servicer Changes?
A servicing transfer can mean that some of the information associated with your mortgage account moves from one company to another.
You may receive information about:
- The name of the new servicer
- The effective transfer date
- Where to send payments
- Online account information
- Customer service contact information
- Escrow information
- Other account instructions
Read the notices carefully and keep them with your mortgage records.
If you have automatic payments set up through your bank, verify whether you need to update the payment instructions.
Do You Need to Refinance When Your Mortgage Servicer Changes?
No.
A change in mortgage servicing does not automatically mean you need to refinance your mortgage.
The mortgage itself can remain in place while the company responsible for servicing the loan changes.
Your interest rate, loan term, and other mortgage terms do not automatically change simply because the servicing company changes.
However, you should carefully review any communication about the transfer and contact the appropriate company if something appears incorrect.
Where Should You Send Your Mortgage Payment?
Your mortgage payment should be sent according to the current instructions provided by your mortgage servicer.
If your loan has recently been transferred, do not rely solely on old payment instructions.
Check the transfer notice or contact the new servicer directly using verified contact information.
This can help prevent payments from being sent to the wrong destination.
What Is an Escrow Account and How Does the Servicer Manage It?
Many homeowners have an escrow account associated with their mortgage.
An escrow account can be used to collect and pay certain property-related expenses, such as property taxes and homeowners insurance.
Instead of paying these expenses separately when they are due, the mortgage servicer may collect a portion of the expected annual expenses as part of the monthly mortgage payment.
The servicer then uses the escrow funds to make the applicable payments when they come due.
Homeowners should review their mortgage statements and escrow information to understand how much is being collected and how the account is being managed.
Can a Mortgage Servicer Change Your Monthly Payment?
Your mortgage payment can change for several reasons.
For example, the principal and interest portion of a fixed-rate mortgage generally remains consistent, but the total monthly payment can change when escrow expenses change.
Property taxes or homeowners insurance premiums may increase or decrease.
An escrow shortage can also affect future payments.
If your mortgage payment changes, review your mortgage statement or escrow analysis to understand why.
What If You Have a Question About Your Mortgage Payment?
Your mortgage servicer is usually the appropriate contact for questions about an existing mortgage account.
You may want to contact the servicer if:
- Your payment amount changed
- Your payment was not credited correctly
- You have an escrow question
- You need a payoff amount
- You recently received a servicing transfer notice
- You have questions about your account balance
- You are having difficulty making payments
Keep records of your communications and any documents you send to the servicer.
What Is a Mortgage Payoff Statement?
A mortgage payoff statement provides the amount needed to pay off the mortgage as of a specified date.
The payoff amount can be different from the principal balance shown on your regular mortgage statement.
It can account for items such as accrued interest and other amounts that may be due.
If you are selling your home, refinancing, or paying off the mortgage early, you may need an official payoff statement from the servicer.
Can Your Mortgage Servicer Help You Refinance?
Your current mortgage servicer may offer refinancing options, but you are not necessarily required to refinance with that company.
Homeowners can generally compare mortgage options from different lenders when considering a refinance.
A refinance replaces the existing mortgage with a new loan.
The current servicer may be able to provide information about your existing loan, while a mortgage professional can help you compare potential new financing options.
Can Your Mortgage Servicer Help If You Are Struggling to Make Payments?
If you are having difficulty making your mortgage payments, contact your servicer as soon as possible.
Do not simply stop making payments without first discussing your situation with the appropriate party.
Depending on your circumstances and the type of mortgage you have, the servicer may be able to explain available hardship or loss mitigation options.
The sooner you communicate about a potential payment problem, the more time you may have to understand your options.
What Should You Do If You Miss a Mortgage Payment?
If you miss a payment, contact your mortgage servicer and find out what happened to your account.
Ask about:
- Current amount due
- Late fees
- Payment status
- Available repayment options
- Whether additional action is required
- How to bring the account current
Do not ignore mortgage statements or collection notices.
If you are experiencing a longer-term financial hardship, explain the situation to your servicer and ask what options may be available.
How Can You Find Your Mortgage Servicer?
Your current mortgage statement should generally identify the company servicing your loan.
You may also find the information in:
- Mortgage account statements
- Online mortgage account
- Servicing transfer notices
- Loan documents
- Payment instructions
If you are unsure, review your most recent mortgage correspondence or contact the company that has been receiving your payments.
What Should You Do If You Receive a Servicing Transfer Notice?
Take the notice seriously and review it carefully.
Confirm:
- The name of the new mortgage servicer.
- The date the servicing transfer takes effect.
- Where future payments should be sent.
- Whether online payment information needs to be updated.
- Whether automatic payments need to be changed.
- How escrow information will be handled.
- Who to contact if you have questions.
Keep a copy of the notice for your records.
What Happens to Automatic Mortgage Payments After a Transfer?
Automatic payments require special attention when servicing changes.
If you have payments automatically withdrawn from your bank account, review the instructions provided with the servicing transfer.
You may need to update the account information or payment authorization depending on how the new servicer handles automatic payments.
Do not assume that an old automatic payment arrangement will automatically transfer.
Confirm the process before the next payment becomes due.
What Happens to Your Escrow Balance After a Servicing Transfer?
Your escrow information generally needs to be transferred along with the mortgage servicing information.
Homeowners should review their first statement from the new servicer and compare the information with their previous records.
Pay particular attention to:
- Escrow balance
- Monthly escrow amount
- Property tax information
- Homeowners insurance information
- Mortgage balance
- Payment history
If something does not appear correct, contact the servicer and request clarification.
Can a Servicing Transfer Affect Your Credit?
A servicing transfer itself does not mean you have taken out a new mortgage.
However, homeowners should make sure payments continue to be made according to the new servicer’s instructions.
A payment sent to the wrong location or a missed payment during a transition can create unnecessary problems.
Keep copies of payment confirmations and transfer notices so you have documentation if a payment issue needs to be investigated.
What If Your Mortgage Statement Looks Different?
A new servicer may use different statement formats or online account systems.
The layout may change even though the underlying mortgage has not.
When you receive your first statement from a new servicer, compare the important information, including:
- Loan balance
- Interest rate
- Monthly payment
- Escrow amount
- Payment history
- Next payment due date
If something looks inconsistent, contact the servicer for an explanation.
What Is the Difference Between a Mortgage Servicer and a Mortgage Broker?
A mortgage servicer and mortgage broker have very different roles.
A mortgage broker helps borrowers explore mortgage financing and connect with lenders.
A mortgage servicer handles the administration of an existing mortgage.
For example, a borrower may work with a mortgage broker when purchasing a home and then make monthly payments to a separate mortgage servicer after closing.
Understanding the difference can help you know who to contact when you have a particular question.
What Questions Should You Ask Your Mortgage Servicer?
If you need assistance with your existing mortgage, consider asking:
- What is my current loan balance?
- What is my next payment amount?
- When is my next payment due?
- How much is currently in my escrow account?
- Has my servicing information recently changed?
- Where should I send my mortgage payments?
- Can I request an official payoff statement?
- Why did my monthly payment change?
- Are there any outstanding amounts on my account?
- What options are available if I am having trouble making payments?
Keeping clear records of the answers can make it easier to manage your mortgage.
Common Mortgage Servicing Mistakes
Sending Payments to the Wrong Company
Always verify the current payment instructions after a servicing transfer.
Ignoring Servicing Transfer Notices
Important information about your account may be included in the notice.
Forgetting to Update Automatic Payments
Review your automatic payment arrangements when servicing changes.
Not Checking Your Escrow Information
Review your escrow balance and payment amount after a transfer.
Assuming the Servicer Is Your Only Refinancing Option
You can compare financing options from different lenders if you decide to refinance.
Ignoring Payment Problems
If you are struggling financially, contact your servicer rather than ignoring the problem.
Throwing Away Mortgage Statements
Keep your mortgage records, especially information about payments, servicing transfers, and payoff amounts.
How the Mortgage Servicer Fits Into the Homeownership Process
The mortgage servicer becomes an important point of contact after your home loan closes.
While the mortgage professional who helped you obtain the loan may have guided you through the application and closing process, the servicer generally handles the ongoing administration of the mortgage.
That means homeowners should know who services their loan and how to contact them.
Keeping this information organized can make routine mortgage management much easier.
How the Faille Team Can Help
The mortgage process does not end when you receive the keys to your home.
Understanding how your mortgage is serviced, how payments are handled, and what happens if your loan is transferred can help you manage your home financing with greater confidence.
The Faille Team helps homebuyers and homeowners navigate mortgage financing and offers a range of loan options for different financial situations.
If you are considering buying a home, refinancing, or reviewing your current mortgage options, working with an experienced mortgage professional can help you understand the financing choices available to you.
Conclusion
A mortgage servicer is responsible for many of the day-to-day tasks involved in managing an existing home loan.
The servicer may collect mortgage payments, manage escrow, maintain account records, provide payoff information, and communicate important information about the loan.
Your mortgage servicer may also change during the life of your loan. If that happens, carefully review the transfer information, update payment arrangements when necessary, and make sure you know where future payments should be sent.
Knowing who services your mortgage and understanding what the servicer does can make it easier to manage your home loan, resolve account questions, and stay on top of your payments throughout homeownership.
