What to Expect When Your Mortgage Servicer Changes?

If you just got a letter saying your mortgage servicer is changing, you’re not alone, and you’re not in trouble. Lenders sell or transfer servicing rights all the time. But that doesn’t mean you should ignore it. Here’s what this means, what to expect, and how to protect yourself.

• A mortgage servicing transfer is common and doesn’t change your loan terms.
• Always verify the new servicer’s legitimacy and update payment details.
• Watch out for scam notices pretending to be your new servicer.
• You have 60 days to avoid late fees during the transition period.
• Stay proactive to prevent escrow disruptions and credit impacts.

A mortgage servicing transfer happens when your lender or current servicer sells the right to manage your loan to another company. It’s usually a back-end transaction, but it affects you directly because you’ll start sending payments to someone else.

Key facts:

• Your interest rate, principal balance, and loan term do not change.
• You’ll receive a “Goodbye Letter” from your old servicer and a “Welcome Letter” from your new one.
• This is regulated under RESPA (Real Estate Settlement Procedures Act) to protect borrowers.

1. Read All Mails Carefully
• Confirm both letters are legitimate. Call your current servicer if unsure.
2. Update Auto-Pay & Banking Info
• Don’t assume transfers are automatic. Manually update payment settings.
3. Watch for the 60-Day Rule
• Under RESPA, you have a 60-day grace period. Payments made to the old servicer won’t incur late fees during this time.
4. Verify Escrow and Insurance
• Double-check that taxes and insurance continue to be paid on time.

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• Sending payments to the wrong company after the transition.
• Ignoring mail because it looks like junk.
• Missing escrow payments leading to unpaid taxes or insurance lapses.
• Falling for phishing scams pretending to be your new servicer.

Scammers prey on confused borrowers. If you get a suspicious call or email:

• Don’t share personal info until you verify the source.
• Contact your previous servicer for confirmation.
• Use verified contact details, not the ones in the suspicious message.

Pro Tip: Look for the “Welcome Letter” and check the NMLS ID. Legit servicers must disclose this under the SAFE Act.

• Keep a physical and digital copy of all mortgage communications.
• Add the new servicer’s portal to your bookmarks.
• Set up payment alerts to avoid late fees.
• Monitor your credit reports to ensure zero errors during the transition.

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