Quick summary

When your loan’s servicing changes, you’ll receive a written transfer notice with the new servicer’s contact information and instructions on where to send payments. The underlying loan contract generally does not change; the transfer affects who collects payments and manages the account. Federal consumer protections and industry practice require cooperation between old and new servicers to avoid misapplied payments or gaps in customer service (see CFPB and RESPA guidance).

Why servicers transfer loans

Servicing transfers happen for business reasons—sales, mergers, portfolio reassignments, or outsourcing operational functions. Transfers are common for mortgages, student loans, auto loans and other consumer credit.

What the notice should include (and what to check first)

  • New servicer name, address, phone number, and effective transfer date.
  • Where to mail or electronically send future payments and whether your account number changed.
  • Whether your escrow (taxes and insurance) account is moving and how any escrow balance will be handled.

When you get a notice, compare it to your last statement to confirm account numbers, outstanding balance, and next payment due date.

Step-by-step actions to protect yourself

  1. Read the transfer notice carefully and save a copy. Paper or emailed notices are both valid.
  2. Verify the new servicer’s contact details and payment instructions before your next payment. If you have autopay, confirm whether it continues or needs reauthorization.
  3. Keep proof of payments (bank statements, payment confirmation numbers) for at least a year after the transfer.
  4. If your payment gets misapplied or delayed during the switch, document communications and ask both servicers for written confirmation of account crediting.
  5. Monitor your escrow account and property-tax or insurance payments for the next 1–2 billing cycles to ensure proper transfer.

Common problems and how to avoid them

  • Conflicting account numbers: Use the exact account number the new servicer provides and keep receipts for any payments you make to the old servicer during the overlap.
  • Automatic payments stopping: Re-enroll autopay if the new servicer requires it and confirm the effective date.
  • Data or identity concerns: Legitimate servicers will not ask for sensitive verification information by unsolicited phone or email. If in doubt, call the number on your prior statement or the lender’s main line.

What the law and regulators require

Federal rules and guidance require servicers to notify borrowers and provide key details about transfers; see the Consumer Financial Protection Bureau for up-to-date transfer guidance and HUD’s RESPA materials for background on borrower protections. These rules focus on transparency, continuity of payment processing, and escrow handling (sources: CFPB, HUD/RESPA).

When to escalate or get help

  • Payments were credited incorrectly and the servicers won’t correct the record.
  • You receive conflicting payoff figures from the old and new servicer.
  • You suspect identity theft or that the notice is a scam.

If you can’t resolve the issue directly, file a complaint with the Consumer Financial Protection Bureau (consumerfinance.gov) and keep copies of all communications. For mortgage-specific concerns, HUD’s RESPA resources explain borrower rights and procedures.

Professional tips from practice

  • Don’t stop making payments: If you’re unsure where to send a payment, keep paying as scheduled and document delivery to avoid late marks.
  • Use traceable payment methods (online bank transfer, certified mail, or payment portals that provide receipts).
  • Keep a single, organized folder (digital or paper) with the last 12–24 months of statements, the transfer notice, and any correspondence.

Useful internal resources

Short FAQs

  • Will my loan terms change? No. A servicer change does not alter your loan agreement unless you and the lender agree to a loan modification.
  • What if I miss a payment during a transfer? Document your payment attempts and contact both servicers. Keep records to dispute any reporting of late payments.

Disclaimer

This article is educational and does not replace individualized legal or financial advice. For a problem that affects your credit or legal rights, consult a qualified attorney or financial counselor.

Authoritative sources