Find a reliable mortgage servicing company to manage your mortgage efficiently. From payment processing to customer support, trust our experienced team to handle your mortgage servicing needs with professionalism and expertise,
A lender can sell the servicing rights to a company that manages the mortgage loan payments, like taxes and insurance from an escrow account. It’s important to know who your mortgage servicer is.
Keep records of your communication with your servicer, including monthly statements and coupon books. These documents can come in handy if you dispute any charges or need to get information from your servicer.
Time to Hire
Mortgage servicing involves all the activities that happen after you get a home loan. Servicing employees answer questions, collect and process payments, manage communications with borrowers, pay taxes and insurance from escrow accounts and calculate monthly payment amounts. They also send borrowers’ payments to buyers in the secondary market, which can include Freddie Mac, Fannie Mae or Ginnie Mae, mortgage REITs, Wall Street brokerage firms and others.
In the past, many homeowners had no choice in who serviced their mortgages. Lenders usually service the loans they originate, but that doesn’t always happen. Mortgage loan servicing contracts are bought and sold in the same way as bonds, so your lender might sell your mortgage to another company that will service it. And if you’re in trouble making your mortgage payments, your servicer will help you develop a plan to get back on track.
As you can imagine, mortgage servicers are busy companies that handle a lot of complicated, often repetitive tasks. They have to meet federal and state compliance standards for foreclosure filings, monthly reports and more. Servicing companies might need to hire additional people when volume is high or to reassign existing staff members to work on more urgent matters.
Because of this, there’s a strong case to be made for outsourcing your mortgage servicer needs to a third-party company. A reputable mortgage loan processing services provider can save you money in the long run, especially during times of low business activity.
It’s important to remember that your mortgage loan is not with your lender; it’s with the servicer that the lender has hired to manage your account. This means that if you’re having trouble with your mortgage, don’t contact the lender — contact your servicer instead. And when you do, be sure to keep copies of your correspondence. Write down the date, time and name of each person you speak with, and what was discussed.
Unlike a house painter, who can be fired for a poor job, it’s very hard to fire a mortgage servicer. That’s why borrowers should try to find a servicer that will be reliable and responsive.
Time to Change
Mortgage loan servicers collect monthly payments from borrowers, send statements and ensure that property taxes and insurance are paid on time. They also work with borrowers in financial trouble and can help them devise a plan to avoid foreclosure, if necessary. In some cases, the mortgage lender and the servicer are the same entity, but often they are not. If the mortgage lender is cagey about its servicing partners, that may be a red flag.
The mortgage servicing company that you end up dealing with depends on the loan type and terms you choose, says Maureen McDermott of McDermott Advisors, a recruiting firm for accounting, investor reporting and management-track roles in banking. Some mortgage servicing companies handle the administration of their own loans, while others contract with other companies to do so. Local or smaller community banks and credit unions may also offer mortgage servicing in-house, though this is less common.
Many borrowers don’t realize that their mortgage servicer and their mortgage lender are not always the same entity. The lender is the financial institution that lends you money to purchase your home, but the servicer is the company that sends you monthly mortgage statements and collects your payments. If the mortgage lender sells your loan to another financial entity, the new company is the mortgage servicer that you’ll deal with from that point on.
When a mortgage loan is sold, you should receive a notice from the old mortgage servicer and one from the new one that includes a statement about your rights as a borrower. The new servicer typically won’t change the terms of your loan, but may change how you make your payments or the amount of your monthly payment. It’s important to read these notices carefully and follow the instructions, says Baker.
If you find that the new mortgage servicer isn’t contacting you or is incorrectly handling your account, file a complaint with the Consumer Financial Protection Bureau. This agency has a mortgage servicing complaint website and hotline that you can call, as well as staff members who can answer questions.
Time to Expense
While borrowers put a lot of thought into selecting a lender to originate their mortgage, they often pay less attention to who will service the loan after it closes. A mortgage servicing company handles a wide range of functions, including sending borrowers monthly statements, collecting payments and paying property taxes and homeowners insurance through an escrow account. It also handles a variety of other administrative tasks. Mortgage servicers make their money by charging a small fee on each payment, which is often built into the interest rate at closing.
Because mortgages can be complicated and involve many documents and third-party verifications, the processing of each one takes time. It’s important for lenders to keep their turn times down as much as possible. One way to do so is to have an efficient mortgage servicing partner that can handle the workload without the additional expense of staffing and technology.
A borrower’s main relationship with the mortgage servicer is through a monthly statement and payment checks. If a servicer makes a mistake or charges a fee that shouldn’t be, a borrower should notify the company as soon as possible. It’s best to do so in a written letter, rather than on a payment coupon or included with the check, which can easily get lost or misplaced. It’s also a good idea to contact the company early in the month, when the staff is likely to be less pressed for time and more available to handle inquiries and requests.
It’s important to understand that a mortgage servicing company doesn’t have the same legal responsibility as a mortgage lender. In fact, a borrower may not even know who their mortgage servicer is if the original lender transfers the mortgage to another party. Lenders may be able to sell servicing contracts, which are like bonds in the financial markets, to different buyers at any time. That gives the original lender a chance to replenish its funds while ensuring that it continues to get the mortgage payments it needs to meet its debt obligations. Borrowers do not have any say in who services their mortgage, and the only way to change that is to refinance.
Time to Save
Mortgage loan originators are always looking for ways to get their mortgages closed faster, but the best way to do that is by outsourcing their servicing needs. The loan servicing company will take care of all the ongoing administrative tasks that go with a loan, including collecting and processing payments, managing escrow accounts for taxes and insurance, sending out tax forms and answering customer questions. In addition, the servicer will keep an eye on borrowers’ payment history and report that information to credit bureaus.
However, as a borrower you’re likely not to have much (if any) interaction with your loan servicing company, and this should not be your focus when shopping for a mortgage. Instead, your focus should be on getting a mortgage with the best possible terms and rates. You can do this by seeking quotes from reputable lenders and asking what their partnership arrangements are with servicing companies.
If a lender is quiet or cagey about who they partner with for servicing, that’s a red flag. A good lender will have no problem naming the names of their partners, and you can do your own research to decide if they’re the right fit for you.
While there’s no question that mortgage servicing companies have a vital role to play, it would be nice if borrowers had some say over who manages their loans. Sadly, this is not the case, and borrowers often find themselves with little or no choice when their servicing contracts are sold off in an active market.
As a result, it’s important for all borrowers to keep records of their interactions with their servicers. This includes a notebook of mortgage statements, coupon books and other documents they send to the servicer. It’s also a good idea to save any documents the servicer requests, such as canceled checks and bank account statements. By keeping these records, borrowers can document problems with the servicing company and make it easier to switch to another one if necessary.
