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Mortgage Servicing

The mortgage industry has seen tremendous changes in recent years. Previously, a mortgage lender would hold and service a loan for the entire term of the loan or until the home was sold. The practice of constantly buying and selling home mortgages exploded over the past decade so that now homeowners might have 2, 3, or even 4 different loan servicers for their mortgages.

A home is usually the biggest investment anyone makes. It makes sense to find out about your loan servicer and be aware of your legal rights. The airwaves have been flooded with stories about homeowners who have had their payments "misplaced" or lost altogether. Many times these people are now facing foreclosure through no fault of their own. Keep track of all your mortgage documents and diligently go over your monthly statements to make sure your payments are being properly credited.

Following is information explaining what a mortgage servicer does and what your rights are:

  • A mortgage servicer collects your monthly payments and credits your account. If you have an escrow account, they will also handle this.
  • An escrow account is a fund which you pay money into to cover charges like property taxes and homeowners insurance. These escrow payments are normally included within your monthly mortgage payments. The servicer then pays your property taxes and insurance from this fund.
  • The mortgage servicer is required to give you an annual statement that details all of the activity of your escrow account. There is no charge for this statement.