Servicer for Mortgage Loan

When the day of your mortgage loan is closed, it does not mean everything is done. You still have to pay attention to your loan. I will explain what happens when your mortgage is sold to a servicer, why your monthly payment might change. When you might consider refinancing. And how to avoid foreclosure in the event that you can't make the mortgage payments.

At closing day, your lenders have to inform you about any plans which turn over the rights to administer of your loan to a mortgage servicer when a mortgage is sold. And the new servicer could be another lender, a bank, an investor or a third-party processing company which will specialize in the servicing mortgages. Over the term of your loan, you may have several mortgage servicers.

And these are some duties of a mortgage servicer:

• They will collect and process for your monthly mortgage payments.

• They have to forward your payments to the investor. The servicer will be on the investor's behalf and they should problems arise with the loan.

• They will help you pay your property tax and homeowners insurance from your escrow account.

• They will send you an annual mortgage statement which has the details about the portions of your mortgage payments which were applied to principal, interest, taxes and insurance, and any adjustments in payments to cover taxes and insurance in the coming year.

• They also counsel and assist you to overcome delinquencies if you miss loan payments.

But you need to remember about some of rules that apply to a change in mortgage servicer:

• You must be notified in writing of the change by both your original servicer and the new one, noting the date of transfer and contact information of the new servicer.

• The new servicer must honor the terms and conditions of your original mortgage agreement, with the exception of those directly related to servicing the loan.

• You must be notified of any changes to terms of your homeowners insurance.

• During the transferring process, you will have a 60-day grace period during which you can not be charged a late fee if you mistakenly send a mortgage payment to your old servicer.

• You can put any questions or disputes which you have for the new servicer in writing and continue to make payments while you settle the dispute.

• The Federal law requires the servicer to investigate your disputes and make any corrections within 60 business days.

After your mortgage servicer has changed, you have to carefully examine your mortgage statements, and you need to make sure that all payments have been recorded and taxes and insurance premiums have been paid on time. You also must retain copies of letters, canceled checks and other paperwork relating to your mortgage and payments in case you need to document any dispute.