Mortgage servicing companies matter more than ever

Chances are, the company that you send your mortgage payments to isn’t the owner of the loan or the original lender.

Instead, payments are sent to a separate “mortgage servicing company.”

Mortgage servicers tend to be out of sight, out of mind. You usually don’t have to interact with them aside from sending monthly payments.

But when you need help from your mortgage servicer — for instance, to remove PMI or request mortgage relief — you want it to be a good experience.

Here’s what you need to know about mortgage servicers, including what to do if you’re unhappy with your company.

In this article (Skip to…)

• What is a mortgage loan servicer?
• Mortgage loan servicers and COVID-19
• When you’ll work with your servicing company
• How to find out who your loan servicer is
• Who are the top mortgage loan servicers?
• Should I care who my mortgage servicer is?
• What to do if you’re unhappy with your servicer
• Shop for a mortgage loan, not a servicer

This includes receiving and processing payments, managing a customer’s escrow account, providing tax forms, assisting with customer inquiries, and other tasks.

The mortgage servicing company also tracks a customer’s payment history and reports this information to the credit bureaus.

Your mortgage loan servicer is also the company you’ll turn to if you need mortgage relief — like a forbearance plan or loan modification — due to financial hardship.

This was the case for millions of homeowners who needed to pause payments or update their repayment plan during the COVID-19 pandemic.

A new awareness of their mortgage servicer bought new pains for some homeowners.

Hours-long hold times, expensive “system glitches,” and credit reporting errors were just a few of the cracks that showed up as mortgage loan servicers dealt with an unprecedented wave of loan relief requests.

As a result, many homeowners will likely pay more attention to who their servicer is moving forward.

So, who are the best mortgage servicing companies? How do you know who yours is? And what should you do if you want a different loan servicer?

• You need to update your homeowners insurance information or ask a question
• You believe your property has at least 20 percent equity, and you want to ask about removing private mortgage insurance
• You’ve been impacted by COVID or another financial setback, and you need to discuss mortgage relief options
• You lost your job or had a decrease in income, and you need to request forbearance to keep your mortgage in good standing

Of course, there’s a good chance that none of these ever apply to you.

And in that case, you might continue making mortgage payments to your servicer without ever having to worry about who that company is or the quality of its customer service.

You can locate this information on your mortgage statement, or you can search the Mortgage Electronic Registration System using your name, property address, and Social Security number.

When your mortgage servicer changes, you’ll receive a letter notifying you of the change at least 15 days before the date of the transfer.

In addition, the new servicer will send a letter upon completion of the transfer.

This letter will include pertinent information such as the name and address of the new servicer, and the date you’ll begin sending payments to the new company.

This is understandable. But when shopping for a mortgage loan, the focus shouldn’t be on the servicing company. It should be on getting the most affordable loan. This can potentially save thousands over the life of the loan.

In all honestly, even if your mortgage lender transfers the servicing rights, you’ll probably have little (if any) interaction with the servicing company.

When shopping for a mortgage, the focus shouldn’t be on the servicing company. It should be on getting the most affordable loan.

Keep in mind, too, that many reputable lenders also partner with reputable servicing companies.

So if you want to increase the odds of having a positive experience with a mortgage servicing company, start by getting rate quotes from well-known, highly-rated lenders.

Also, don’t be afraid to ask questions. If you’re concerned about servicing, inquire as to whether a lender services their own loans.

If they’ll transfer your mortgage, get the name of the servicing company they use. From there, you can research the company to make sure it has a good reputation and high ratings with its customers.

Even so, if you’re unhappy with your loan servicer or experience major issues, you can file a complaint with the Consumer Financial Protection Bureau.

Remember, too, that not every lender transfers their loans to a servicing company.

Some lenders have the capacity to service their own loans and handle the ongoing administration of these loans. This is rare, but it does happen.

If you prefer a lender that provides their own servicing, you can apply with one of the following banks:

• Quicken Loans
• Chase
• Union Bank
• US Bank
• Flagstar

In addition, many local and smaller community banks service their own loans, as well as some credit unions.