Mortgage Servicing

Your monthly mortgage payments are handled by what is known as a mortgage servicer.The mortgage servicer is responsible for collecting your monthly payments and handling your escrow account.

Your escrow account is a special account held in your name to pay obligations such as property taxes, insurance premiums and other escrow items. The mortgage servicer uses the funds from your escrow account to insure that these expenses are paid in a timely fashion. This avoids the risk of having lapsed insurance coverage or delinquent taxes. And it gives you the peace of mind of knowing that you won’t have to make large lump sum payments during the course of the year.

At the time the escrow account is established, your mortgage servicer is required to provide you with a statement of estimated expenses and the expected total of those expenses for the next 12 months.

Each year thereafter, the mortgage servicer is required to provide a statement that outlines what portion of your mortgage payments were applied to principle, interest, taxes, insurance, and other escrow items. The annual statement also details any adjustments in payments to cover taxes, insurance and other escrow items.

During the course of your loan, your mortgage servicing company may change. Prior to a change, your current mortgage servicer must notify you in writing with the effective date the first mortgage payment is due at the new mortgage servicer’s office.  You should also receive notification from your new mortgage servicer. These notifications should include:

• Name and address of the new mortgage servicer.
• The last date your current mortgage servicer will be accepting your mortgage payments. 
• The date your new mortgage servicer will begin accepting payments.
• Free or collect telephone numbers to call for more information about the transfer of service for both your current and new mortgage servicers.
• Notice of whether you may continue any option insurance (such as disability insurance).  Also what action, if any, you have to take to maintain coverage.  As well as whether the insurance terms will change.

In the event that your mortgage servicer changes, the new servicer is required to honor the terms and conditions of your original mortgage agreement. This requirement’s exception is the terms and conditions related directly to servicing the loan.

Following the transfer, you’ll have a 60 day grace period in which you cannot be charged a late fee if you mistakenly send your mortgage payment to the old servicer rather than the new one. 

If you have any questions or disputes with the new servicer, contact your servicer in writing. Continue to make your monthly payments while your dispute is settled.  The servicer is required to investigate disputes and make any necessary corrections within 60 business days.