The mortgage lender is the financial money to whom you submitted an application for a loan and ultimately provided you with the funds. It might be a bank, a credit union, or a mortgage-specific organization. On the other hand, the organization responsible for managing your mortgage's administration is referred to as the servicer. Your mortgage statements and invoices, as well as the processing of your payments and responses to any queries or issues you may have, will be sent to you by this entity. Additionally, they will handle your escrow account for you. Mortgage lenders can service their own debts in certain circumstances.

In many instances, lenders have a specialty in originating loans; nevertheless, they cannot manage the day-to-day administrative responsibilities associated with having a mortgage. They transfer (or sell) the servicing rights of their loans to a specified servicer, a firm specializing in the actual monitoring and administration of mortgages. This prevents them from having to handle these responsibilities internally inside the organization.

Finding out that your mortgage has been moved or sold may be quite upsetting, particularly if it happened without your participation or agreement. After all, you presumably invested much time and effort into researching different lenders. You probably had high hopes of maintaining a relationship with the lender you ultimately picked.

The selling of your debt does not need to be an intimidating experience, thankfully. You should get a notification of transfer in mail. The letter should include the date by which you will need to begin working with new servicer and servicer's name and address of payment. Your payment, the conditions of the loan, and any other particulars will stay the same. It is quite usual for servicing rights to be transferred. It is also possible that you may have to deal with the transfer of your mortgage numerous times during the duration of your loan.

What Duties Does an Actual Mortgage Servicer Carry Out?

Your loan's servicer is the party responsible for administering its particulars. It is to this person that you will submit your payments, and it is also this person that you will contact with any queries or issues that may occur. The following is a list of the general responsibilities of a mortgage servicer:

• Taking payments and handling their processing
• Monitoring outstanding amounts and accrued interest
• The administration of escrow accounts
• Escrow payments are being made for real estate taxes and insurance premiums.
• Providing answers to questions posed by borrowers
• Initiating the process of foreclosure in various circumstances

If you no longer want private mortgage insurance (PMI), you may deactivate your policy by contacting the company that handles your servicer. You may find the date you'll be able to cancel your PMI coverage by checking the disclosure form sent to you, or you can contact the servicer directly for further information.

What You Should Do When You Have a New Servicer to Attend to Your Needs

Carefully read the notification that was provided

Check to see any mistakes or omissions on your transfer notification. If you find any, you should report them to the servicer as soon as possible so that they may be fixed.

Make sure that any recurring payments that you have set up are up to date

Ensure the payment address is updated to reflect one of your new servicers.

Verify this information with your homeowner's insurance

You will want to ensure that the insurance company is aware of the loan transfer if your homeowner's insurance premiums are deducted from an escrow account. Ensure to get in touch with your agent and provide them with the new servicer's information. (The servicer may have already taken care of this, but it doesn't hurt to check.)

You are granted a payment grace period of sixty days after the ownership of your loan is changed. This ensures that even if you make a mistake paying your old servicer instead of your new one, you will not be subject to any late fees or other penalties.

Conclusion

Mortgage creditors often sell or otherwise dispose of the servicing rights associated with loans. It's rather common; therefore, there's no need to be afraid. When your loan is moved to a new servicer, the conditions of the loan and the payment that you are required to make will not change; nevertheless, the address where payments are sent will change. Make sure that any pre-set automatic payments have been brought up to date. Your mortgage might be moved numerous times to other institutions during the loan term. Whenever there is a transfer of ownership, you will have a grace period of one month and should always be given advance notice of the change.