What is the function of the mortgage servicer?

The responsibility of a mortgage servicer is to collect your monthly loan payments, making sure that your account is properly credited, and to manage your mortgage escrow, if you have one.  You may deal with more than one servicer during the life of the loan.  Often the rights to service a loan are bought and sold over the time it takes to pay off a mortgage.  The original mortgage agreement will not change, but the servicing conditions might.  It is important that you understand what a mortgage servicer does and what your rights are.

Under The Real Estate Settlement Procedures Act (RESPA), enforced by the Department of Housing and Urban Development, a mortgage servicer is required to make escrow obligations in a timely manner, provide an itemized projection of due dates and amounts to be paid over the next 12 months and a detailed annual statement of the activity of your escrow account.  The servicer is also required to respond promptly to written inquiries of disputed charges.  But, if there are disputed charges, continue making the mortgage payment while you work out the issues. 

The function of the mortgage servicer is to ensure a smooth transaction process during the life of the mortgage loan.  However, the escrow funds belong to you.  The Federal Trade Commission (FTC) works to protect the consumer from unfair business practices.  If you have a complaint, you may want to contact 1-877-FTC-HELP. 

If your loan is about to be sold, your servicer should send you a notice within 15 days of the transfer.  The new servicer will also send you a notice after the transfer with pertinent information, especially the date of when your first mortgage payment is due at the new office, name and address of the new servicer, and any insurance concerns that will be affected by the transfer.