Quick overview
After you sign closing documents, the company listed as your loan servicer becomes the day-to-day manager of the loan. That servicer may be the original lender, a bank affiliate, or an independent servicing company. They handle payments, keep the official account ledger, manage escrow for taxes and insurance (if applicable), report payment activity to credit bureaus, and administer loss-mitigation efforts such as forbearance or modification when borrowers hit trouble.
This role matters: the servicer’s processes determine how quickly payments are posted, how escrow shortages are handled, how effectively problems are escalated, and whether you receive clear, timely notices if servicing changes. The Consumer Financial Protection Bureau (CFPB) requires servicers to inform borrowers about key changes and provides guidance on borrower protections (see CFPB resources).
Who can be your loan servicer?
- Lender-service model: Many lenders keep servicing in-house and service the loans they originate.
- Third-party servicer: Lenders often sell the right to service a loan to specialized companies that focus on billing, escrow accounting, and borrower support.
- Investor/agency servicing: Loans owned by Fannie Mae, Freddie Mac, or Ginnie Mae may be serviced by an approved servicer but ultimately follow the investor’s loss-mitigation policies.
Servicing changes are common. By law, servicers must notify you when a servicing transfer happens and provide contact information for both the outgoing and incoming servicer (see CFPB guidance on mortgage servicing transfers).
What exactly does a servicer do?
- Payment collection and processing: Apply principal and interest payments, record dates, handle partial payments, and manage returned payments.
- Escrow administration: Collect monthly escrow contributions, pay property taxes and insurance, and perform annual escrow analyses to track shortages or surpluses (if your loan has an escrow account). See our explainer on [escrow accounts for mortgages](
