What Is a Mortgage Servicer?
A mortgage servicer is the company that takes care of all your servicing needs with your mortgage. They accept your payments and calculate the portion that goes to principal and interest. Sometimes your original mortgage lender is your mortgage servicer, and sometimes they are different.
-
Significance
-
When you take out a mortgage loan from a lender, it may sell your loan to an investor such as Freddie Mac or Fannie Mae. These are companies sponsored by the government that purchase mortgages from lenders. When the purchase is complete, they become your mortgage servicer.
Considerations
-
The originating lender may sell your loan because they make an immediate profit, which is a percentage of your loan amount.
Effects
-
A mortgage servicer is responsible for accepting your payments and making sure your payments are documented.
Function
-
Many borrowers have escrow accounts, where a portion of their mortgage payment is allocated for the payment of taxes and insurance. When the mortgage servicer receives your bills for taxes and insurance, it will issue payment from the escrow account.
Features
-
Mortgage lenders can choose to become servicers. Whether they do or not is dependent upon their business strategy, customer service goals and objectives, and the complicated paperwork involved with the financial reporting. To become a mortgage servicer, a lender has to have adequate staff, space and equipment, according to questia.com.
Prevention/Solution
-
If you fall past due on your mortgage payments, you will need to speak with your mortgage servicer so that arrangements can be made to bring your account current. The mortgage servicer would also initiate foreclosure if necessary.
-
