Mortgages & Home Loans Financing Your Home Purchase What’s the Difference Between a Mortgage Lender and Mortgage Servicer? Your original mortgage lender probably won’t be with you for life By Aly J. Yale Aly J. Yale Twitter Aly J. Yale is the homebuying, home loans, and mortgages expert for The Balance. With over 10 years of experience as a freelance writer and journalist, Aly has also contributed to online media outlets including Forbes, The Motley Fool, CreditCards.com, and The Simple Dollar, with areas of focus covering real estate, mortgages, and related financial topics. She holds a bachelor's of science in communication from Texas Christian University. learn about our editorial policies Updated on November 5, 2021 Reviewed by Andy Smith Reviewed by Andy Smith Andy Smith is a Certified Financial Planner (CFP), licensed realtor and educator with over 35 years of diverse financial management experience. He is an expert on personal finance, corporate finance and real estate and has assisted thousands of clients in meeting their financial goals over his career. learn about our financial review board Share Tweet Pin Email In This Article View All In This Article Why Two Companies? What Does a Mortgage Servicer Actually Do? What To Do When You Have a New Servicer Photo: LaylaBird/Getty Images If you’re like most homeowners who financed their property, then you’ll likely encounter two parties handling your mortgage. First, you’ll work with a lender, then you’ll have a mortgage servicer. The mortgage lender is the company you applied to for your loan and the one that lent you the money. It might be a bank, credit union, or dedicated mortgage company. The servicer, on the other hand, is the company charged with handling the management of your mortgage. It’s the one that will send your mortgage statements and bills, process your payments, and respond to any questions or concerns you might have. They also manage your escrow account. In some cases, mortgage lenders may service their own loans. Note Not sure who your servicer is? Try the MERS ServicerID tool to find out. Have your loan number on hand, if possible. Why Two Companies? In many cases, lenders specialize in the origination of the loan, but they’re not equipped to handle the day-to-day administrative tasks that come with a mortgage. Instead of managing these duties in-house, they transfer (or sell) the servicing rights of their loans to a designated servicer—a company that specializes in the actual management and administration of mortgages. It can be frustrating to learn your mortgage has been transferred or sold, especially without your input or consent. After all, you probably spent valuable time and energy researching lenders, and you were hoping to have that chosen lender for the long haul. Fortunately, the sale of your loan doesn’t have to be scary. You should get a notice of the transfer in the mail, detailing your new servicer’s name and payment address, as well as the date you’ll need to start working with it. Your payment, loan terms, and other details will remain the same. Note The transfer of servicing rights is very common. You might even see your mortgage transferred several times over the course of your loan. What Does a Mortgage Servicer Actually Do? Your servicer is in charge of managing the details of your loan. It is whom you’ll send your payments to, and it’s also whom you’ll call if you have questions or if problems arise. The general duties of a mortgage servicer include: Accepting and processing payments Tracking balances and interest paid Managing escrow accounts Making property tax and insurance payments via escrow Responding to borrower questions Initiating foreclosure, in some cases In the event you want to cancel your private mortgage insurance (PMI), you would do that through your servicer, as well. Check your PMI disclosure form for the date you’ll be eligible to cancel, or contact the servicer directly for more information. What To Do When You Have a New Servicer If you’ve recently received notice that your loan has a new servicer, there are a few steps you should take to protect yourself. Review the notice carefully: Check your transfer notice for any errors or omissions. If you spot any, you’ll want to notify the servicer and get these corrected ASAP. Update any automatic payments you have set up: Make sure you change the payment address to your new servicer’s. Check with your homeowner’s insurance: If your homeowners insurance premiums are paid out of an escrow account, you’ll want to make sure the insurance company knows of the loan’s transfer. Contact your agent and give them the new servicer’s info. (The servicer may have done this already, but it doesn’t hurt to check.) When your loan is transferred, you have a 60-day grace period on payments. This means that if you accidentally pay your old servicer instead of your new one, you won’t get hit with a late fee or other penalties. Key Takeaways Mortgage lenders often transfer the servicing rights of loans. It’s common and not something to fear. When your loan is transferred to a new servicer, your loan terms and payment will remain the same, but the payment address will change. Make sure to update any automatic payments you have set up. Your mortgage may be transferred several times during the course of the loan term. You should always receive notice ahead of time, and will have a 60-day grace period any time a transfer is made. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Consumer Financial Protection Bureau. "What's the Difference Between a Mortgage Lender and a Servicer?" Consumer Financial Protection Bureau. "What Happens If the Company That I Send My Mortgage Payments to Changes?"