Mortgage servicers are the companies that you make your monthly mortgage payments to. But sometimes, your mortgage servicer might change without warning. Find out why this happens and what you can do about it.
Reasons why your servicer might change
Your mortgage servicer is the company that you send your monthly mortgage payments to. This company is responsible for collecting your payments and applying them to your loan balance.
They may also handle customer service inquiries, provide information about your loan, and offer assistance if you fall behind on your payments.
Your servicer might change for a number of reasons.
- Your servicer might change hands if the company that owns it is bought by another company
This can happen often in the mortgage industry, and it can lead to servicers being sold off or merged with other companies.
For example, if Company A buys Company B, then all of Company B’s customers will become Company A’s customers. This means that your servicer could change even if you don’t do anything.
- Your servicer might simply decide to outsource its servicing operations to another company
This is usually done to save money or because the servicer wants to focus on other aspects of the business.
For example, a mortgage servicer might outsource its customer service operations to a call center. Or, it might outsource its loan servicing to another company that specializes in that.
- The government might take over your servicer
This can happen if your servicer is struggling financially or if it’s accused of violating certain regulations.
- Your servicer might go out of business
This is usually pretty rare, but it can happen. For example, Countrywide Financial went bankrupt during the financial crisis.
If your servicer does go out of business, then your loan will likely be transferred to another servicer. But if you’re in the middle of a foreclosure or bankruptcy, then things could get complicated.
- You might choose to transfer your loan to another servicer
In some cases, you might be able to choose which servicer you want to use. For example, if you’re refinancing your mortgage, you might be able to pick a new servicer.
Or, if you’re unhappy with your current servicer, you might be able to transfer your loan to another one. But this can be difficult and it’s not always an option.
What you can do if your servicer changes
If your servicer changes, there are a few things you can do to make sure that your mortgage is still being managed properly.
First, you should contact the new servicer and introduce yourself. You’ll want to find out what their policies are and how they plan on servicing your loan.
Second, you should keep track of all correspondence from your servicer. This includes any letters or emails you receive, as well as any phone calls you have.
Third, you should stay on top of your payments. Even if your servicer changes, you’re still responsible for making your payments on time.
So be sure to set up some sort of reminder system (e.g., a calendar alert) to make sure you don’t miss a payment.
Lastly, if you have any questions or problems, don’t hesitate to reach out to the new servicer. They should be able to help you with anything you need.
The bottom line
Mortgage servicing companies can change for a variety of reasons. It’s important to stay on top of who your servicer is, as well as their policies and procedures. If you have any questions or problems, don’t hesitate to reach out to them.
