What is Mortgage Servicing?

By Karen Lawson
LoanPage.com Columnist

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You're having problems associated with adjustable mortgage interest rates. You've called your mortgage lender to discuss your mortgage, and they've told you to contact your mortgage servicer. What are mortgage servicers and how can they help you?

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Mortgage servicing, (also called loan servicing) companies take care of day to day maintenance of mortgage loans. They process your mortgage payments, and may also pay property taxes, mortgage insurance, and hazard insurance premiums on your behalf. Mortgage lenders and servicers can change throughout the life of your loan. Here's how the process works.

Why Did my Lender Sell my New Home Loan?

You've just settled into your new home, and receive notification from your lender that your mortgage has been sold to another company. Why did this happen, and what can you do? The answer is that buying and selling mortgage loans is common practice. The terms of your mortgage loan cannot be changed due to its sale. The new holder of your mortgage may be a government sponsored enterprise such as Fannie Mae or Freddie Mac. These companies buy mortgages, but do not take care of loan servicing. They pay loan servicing companies to take care of managing your mortgage loan.

If you're having problems with any aspect of your mortgage loan, it's important to contact your loan servicing company right away. Someone there can answer questions and provide specific assistance to meet your needs. Although financial matters may be difficult to discuss, failing to resolve issues with your mortgage can result in additional costs and may negatively affect your credit rating.

About the Author
Karen Lawson is a freelance writer with more than fifteen years of experience in mortgage banking. She holds BA and MA degrees in English from the University of Nevada, Reno.

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