| House Refinance Center |
| Mortgage Servicing |
| Mortgage Servicing: Get To Know The Company That Collects Your Money |
| Many years ago when you purchased a house and obtained a mortgage the bank or lender that you took the loan from kept the transaction for the life of the loan or until the house was sold. In our current mortgage environment, mortgages are bought and sold everyday. As a result you might be dealing with two different companies, one that has the mortgage, and another that does the servicing. It is your duty as a homeowner to know the company that owns your mortgage and the company that services the mortgage. The mortgage servicer is responsible for the day-to-day management of your mortgage loan account, including collecting and crediting your monthly loan payments, and handling your escrow account, if you have one. The servicer is who you contact if you have questions about your mortgage. Your escrow account. The servicer sets up an escrow account for you. From the escrow account the servicer pays your property taxes and your house insurance. Your monthly payment covers the mortgage (principal and interest), plus the taxes and the insurance. Within 45 days, the law stipulates that your servicer has to give you a statement outlining an estimate of the taxes and the insurance. The servicer is also required by law to provide you with a statement once a year detailing how much was paid for property taxes and how much for house insurance. This statement usually comes in January, and represents transactions for the previous year. The most important detail on the statement is the balance owing on the mortgage. This statement can be used for income tax purposes. New ownership of your mortgage. It is not unusual for your lender to sell your mortgage. When this transaction is finalized, the new owner must give you a notice that includes: the name, address and telephone number of the new owner of the loan the date the new owner takes possession of the loan the person who is authorized to receive legal notices and can resolve issues about loan payments where the transfer of ownership is recorded. The new owner must give you this notice within 30 days of taking possession of the loan. New servicer. In the mortgage business loan servicers come and go. Many lender have subsidiaries that are servicing companies. If your loan is transferred to a new servicer, you generally get two notices: one from your current mortgage servicer; the other from the new servicer. In most cases, your current servicer must notify you at least 15 days before the effective date of the transfer, unless you received a written transfer notice at settlement. The effective date is when the first mortgage payment is due at the new servicer’s address. The new servicer must notify you within 15 days after the effective date of the transfer. Both notices must include: The name and address of the new servicer; The date the current servicer will stop accepting your mortgage payments; The date the new servicer will begin accepting your mortgage payments; Telephone numbers for the current and new mortgage servicer, for information about the transfer; Whether you can continue any optional insurance, such as credit life or disability insurance; what action you must take to maintain coverage; and whether the insurance terms will change; A statement that the transfer will not affect any terms or conditions of your mortgage, except those directly related to the servicing of the loan. For example, if your contract says you were allowed to pay property taxes and insurance premiums on your own, the new servicer cannot demand that you establish an escrow account. A statement explaining your rights and what to do if you have a question or complaint about the servicing of your loan. There is a 60-day grace period after the transfer: during this time you cannot be charged a late fee if you mistakenly send your mortgage payment to the old servicer |
| The Correct Way To Handle Disputes And Inquiries With Your Mortgage Servicer It is important that you know how to deal with a dispute on your mortgage. Under federal law, your mortgage servicer must respond promptly to written inquiries, known as “qualified written requests”. If you believe you’ve been charged a penalty, late fee or some other fee by mistake, or if you have other problems with the servicing of your loan, write to your servicer. Include your account number and explain why you believe your account is incorrect. Send your correspondence to the address the servicer specifies for qualified written requests. The servicer must send you a written acknowledgment within 20 business days of receiving your inquiry. Then, within 60 business days, the servicer must correct your account or determine that it is accurate. The servicer must send you a written notice of the action it took and why, as well as the name and phone number of someone to contact. Do not subtract any disputed amount from your mortgage payment. Your servicer might consider this a partial payment and refuse to accept it. Your payment might be returned to you or put in a “suspense” or “hold” account until you provide the rest of the payment. Either way, your servicer may charge you a late fee or claim that your mortgage is in default and start foreclosure proceedings. If you have a complaint, do not send a complaint letter with your mortgage payment. This could confuse the situation and make things worse. Research source: Federal Trade Commission |
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| My Mortgage Servicer? For sure we know who gave us the mortgage and we know our lender. But do we know who services our mortgage? We assume it is the bank the services our mortgage. But in many case we would be wrong. The lenders farm out this work to companies. These companies basically keep track of mortgages. They know when you pay. They know when you miss a payment. They know if there are liens. If it is true that knowledge is power, then these are some very powerful companies. The problems with servicing companies arise when a bank transfer a portfolio of mortgages. The recent financial difficulties in the mortgage market resulted in several banks and lenders closing their door. When this happened the mortgages were transferred to another bank. Or in a few occasions the bank simply had to sell off some assets, such as mortgages, to stay afloat. Transfers are mundane, everyday issues. There is nothing personal. You are only an account number. You will get a letter saying that your mortgage was transferred. CHECK IT OUT. We do not want you to pay the wrong guys. Watch the slideshow. |
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