Servicer

A mortgage servicer is a lender, bank, an investor, or any third party processing company to whom your lender gives the rights to service your loan. The RESPA requires your lender to disclose at closing whether he will sell off your loan to a mortgage servicer.

You may also have to deal with more than one servicer during the loan period. The servicer carries out the following duties.

• Collects and processes the monthly mortgage payments.
  
  
• Sends your payments to the investor who actually owns your mortgage. He also checks for any problems in your mortgage on behalf of the investor.
  
  
• Collects your property tax payments and homeowners insurance from your escrow account.
  
  
• Provides you with an annual statement that reveals how much you have paid towards your loan amount, interest, taxes and insurance. You also get to know how much you will pay to make up for the taxes and insurances in the coming year.
  
  
• Helps you in times of delinquencies if your payments are delayed. The servicer may also help you out with the alternatives to foreclosure. For instance, he can help you in cases of forbearance or for deferring the principal and interest payments. But in case of serious default in the payments, the servicer may conduct foreclosure on behalf of the lender.

There are several rules that should be followed if your mortgage servicer changes.

• Both the original servicer and the new one must notify you in writing if any changes are made in loan servicing. The date of transfer and the contact information of the new servicer must also be provided in writing.
  
  
• The new servicer must agree to the terms and conditions of the mortgage.
  
  
• You will be given a 60-day grace period for which you won't have to pay a late fee if you mistakenly send a mortgage payment to your original servicer.
  
  
• The new servicer should resolve any such dispute within 60 business days. You should continue making the payments while the dispute is being resolved.

When your loan servicer is changed, you should examine whether all your payments have been recorded in time. You should also retain copies of letters to the original servicer, canceled checks and other documents related to your mortgage in case you need them in times of disputes.