Most borrowers refer to the company they send their mortgage payments to as the “mortgage lender.” However, it’s important to note that the lender typically only facilitates the creation and funding of the loan. After that, loans are often transferred to a mortgage servicer, which manages the ongoing payments and customer service.

Differences between mortgage lenders and mortgage servicers

Key terms

Mortgage lender

Mortgage lenders provide money borrowers use to buy, build or make improvements to homes. They also provide refinancing options.

Mortgage servicer

A mortgage loan servicer takes care of the loan’s day-to-day administration until the borrower pays it off.

Some lenders handle their own mortgage servicing, but many are not large enough to manage this aspect profitably. As a result, they often delegate this responsibility to a mortgage servicing company.

What do mortgage lenders do?

Mortgage lenders are responsible for the origination and funding of mortgages, which includes several steps:

  1. Assisting borrowers in selecting a home loan
  2. Taking the mortgage application
  3. Processing the loan
  4. Underwriting the loan
  5. Preparing loan documents
  6. Funding the mortgage

After closing, most lenders transfer the loans to a servicing company. Your closing documents may indicate that your loan will be transferred at closing, or you might receive notification afterward.

Some lenders manage their own mortgage servicing, and many borrowers prefer this arrangement. Before applying, you can inquire whether a lender outsources servicing.

If your lender doesn’t service its own loans, don’t worry—many don’t. Most borrowers set up automatic payments, leading to minimal interaction with the servicer.

What do mortgage servicers do?

The mortgage loan servicer takes over once the lender transfers the loan. Their responsibilities include:

  • Processing and managing payments
  • Tracking loan balances and interest payments
  • Generating tax documents
  • Managing escrow accounts
  • Overseeing loss mitigation programs
  • Initiating foreclosure proceedings if the borrower defaults
  • Handling requests to cancel mortgage insurance

Additionally, your mortgage loan servicer may report your payment history to credit bureaus. If you notice an error in how your payments were reported, reach out to your servicer and the credit bureau to address the issue, rather than contacting your mortgage lender.

How to find your mortgage servicer

You can locate your current servicer on your latest mortgage statement. Alternatively, you can ask your mortgage lender about where your loan was transferred. Another option is to use the Mortgage Electronic Registration System (MERS). If your loan is registered with MERS, you can find it by searching their website using your property address or your name and Social Security number, or you can call MERS toll-free at 888-679-6377.

What happens when my loan moves to a new servicer?

Transferring your loan to a mortgage servicer does not alter the terms of your mortgage; it simply means you’ll be sending your payments to a different entity, and you may receive a new account number.

If your lender transfers your loan without notifying you at closing, you will receive two letters: a “goodbye” letter from your current mortgage lender and a “hello” letter from the new mortgage servicing company.

Typically, your lender is required to send the goodbye letter at least 15 days before the transfer takes effect, which is when your first payment is due at the new servicer’s address. The new servicer must then send their hello letter within 15 days after the transfer takes effect.

In some cases, borrowers receive a single letter from both the old and new companies, which must also be sent at least 15 days prior to the transfer.

Both letters will include:

  • The name and address of the new servicer
  • The date the lender will stop accepting payments
  • The date the new servicer will start accepting payments
  • Contact numbers for both the old lender and the new servicer
  • A statement confirming that the transfer does not change your mortgage terms
  • Information on your rights and instructions for addressing questions or complaints about the servicing of your loan.

Can you change your mortgage servicer?

Unfortunately, you have no control over which company services your loan. If you wish to avoid mortgage servicing companies, consider opting for self-servicing lenders when applying for a mortgage. Should you experience issues with your servicer, keep detailed records of all your interactions, and if necessary, file a complaint with the Consumer Financial Protection Bureau (CFPB).

If you’re dissatisfied with your current mortgage servicer, you can refinance your loan with a different lender that services the loans they originate. However, keep in mind that there’s no guarantee they will continue servicing your loan long-term. Additionally, don’t refinance just for a new servicer; ensure that the new loan also offers other benefits, such as a lower interest rate.