Mortgage Resource Guide
Loan Servicing
154 articles10 sections
How loan servicing works
- What Is Loan Servicing?Start here Loan servicing is the day-to-day handling of a mortgage from closing to payoff: collecting payments, running escrow, sending statements, and helping if you fall behind.
- Can I Change My Mortgage Servicing Company? No. The loan's owner picks the servicer. You can only leave by refinancing or paying off the loan, but federal rules let you force your servicer to fix errors.
- How Do Mortgage Servicers Make Money? Servicers earn a yearly fee, often 0.25% of your loan balance, taken from your interest, plus float, late fees, and other charges, and they can sell servicing rights.
- Is There Any Difference Between a Bank and a Non-Bank Mortgage Servicer? Banks and non-bank servicers have different regulators and funding, but the same federal servicing rules protect you with either. Check licenses on NMLS.
- What Happens if My Mortgage Is Sold or My Servicer Changes? Your loan terms stay the same. You get transfer notices 15 days before and after a servicer change, and on-time payments to the old servicer count for 60 days.
- What Is the Difference Between a Servicer and a Mortgage Holder? The mortgage holder owns your loan and receives the principal and interest. The servicer collects your payments, runs escrow, and handles your account for the owner.
- Which Servicing Companies Are Considered to Be the Best? Chase ranked first in J.D. Power's 2026 servicer study (694 of 1,000), ahead of Rocket Mortgage and Bank of America. The industry average was 607.
Successors in interest
- Am I Liable for the Loan Once Confirmed as a Successor in Interest? No. Confirmation does not make you personally liable unless you assume the loan or signed the note, but the lien stays and the home can be foreclosed if no one pays.
- What Is the Successors in Interest Rule for Servicing Companies? Federal rules make servicers confirm heirs and family members who receive a mortgaged home, then treat them as borrowers for statements, errors, and foreclosure help.
Your rights and complaints
- Are Servicers Allowed to Charge a Borrower for Force-Placed Insurance Coverage? Yes, if your homeowners insurance lapsed and the servicer sent two notices, 45 and 15 days before charging. Show proof of coverage and it must refund any overlap.
- Are There Any Federal Laws Protecting Me from Mortgage Servicers? Yes. RESPA and the Truth in Lending Act, through CFPB rules in effect since 2014, set deadlines for payments, statements, error fixes, and foreclosure.
- Are There Any Rules Regarding Written Communication with Servicing Companies? Yes. A written notice of error or information request makes your servicer acknowledge it in 5 business days and answer in 30, with no fee.
- Are There Any Special Rules for Servicers When Dealing with Delinquent Borrowers? Yes. Your servicer must try to reach you by day 36, send options by day 45, review a complete application in 30 days, and wait 120 days to start foreclosure.
- Can I Turn to a Government Agency to Complain Against a Mortgage Servicing Company? Yes. File with the CFPB online or at (855) 411-2372, or your state regulator; HUD helps with FHA loans and VA with VA loans. Servicers usually answer in 15 days.
Statements and rate change notices
- Are There Any Exceptions to the Periodic Statement Rule? Yes. Reverse mortgages, HELOCs, timeshares, small servicers, and coupon book loans are exempt, and statements can stop in some bankruptcies and after a charge-off.
- What Are Coupon Books and When Can They Replace Periodic Statements? A coupon book is a booklet of tear-off payment slips. A servicer can send one instead of monthly statements only on a fixed-rate loan that meets federal rules.
- What Is the Periodic Statement Rule for Mortgage Servicers? Federal law requires your servicer to send one statement each billing cycle, within about 4 days after your grace period ends, showing the amount due, fees, and balance.
- What Is the Rule on Interest Rate Adjustment Notices? On an ARM, your servicer must send a notice 210 to 240 days before the first payment at a new rate, then 60 to 120 days before each later payment change.
Payments and payoff
- Can I Make Extra Payments on My Mortgage? Yes. Most mortgages allow extra principal payments with no fee. Mark them principal only; they cut interest and the term, and a recast can lower the payment.
- Can the Loan Servicer Refuse to Provide You with a Payoff Balance Statement within 7 Days? Generally no. A servicer must send a payoff statement within 7 business days of a written request, unless bankruptcy, foreclosure, or a disaster delays it.
- How Much of My Payment Goes Towards the Principal and How Much Goes Toward Interest? Early payments are mostly interest: at 7.32%, the first payment on a $400,000 30-year loan is 89% interest. Principal is the larger share only after year 20.
- What Is the Prompt Payment Crediting Rule for Servicing Companies? Your servicer must credit a full mortgage payment as of the day it arrives. Partial payments can wait in a suspense account until they add up to a full payment.
Closing costs
- What Is Included in Closing Costs? Closing costs are lender fees, third-party services, government fees, prepaids, and escrow deposits. Most are due at closing as part of your cash to close.
- Which Closing Costs Are Negotiable? Lender fees such as origination, underwriting, and points are the most negotiable. You can shop for title and settlement services. Taxes and recording fees are fixed.
- Who Pays Closing Costs on a House? The buyer pays most closing costs. Seller credits are capped by loan type (2% to 9% conventional, 6% FHA), and lender credits or financing can cover some costs.
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