What Are Your Rights as a Borrower During a Loan Servicing Transfer?

A loan servicing transfer happens when a different company takes over the administrative work for your mortgage or other loan. That change can affect where you send payments, how escrow is handled, and which customer service team answers your questions. Your core loan contract — rate, term, amortization schedule and other material terms — does not change because of a transfer. But communication gaps, misapplied payments, and escrow reconciling errors are common during transitions. This guide explains the rights that protect you, practical steps to reduce risk, and where to go for help.

Core rights you should expect

  • Written notice of the transfer that identifies the old servicer, the new servicer, and how to make payments. Federal consumer protections require servicers to provide borrowers with clear contact and payment information when servicing changes hands (see CFPB guidance).
  • Continuity of loan terms. The new servicer must honor the legal terms of your loan contract — interest rate, payment amount, and repayment schedule — unless you and the lender separately agree to a modification.
  • Accurate payment posting and allocation. Payments you make on time to the address or method the notice identifies should be credited properly. If a payment was mailed to or processed by the old servicer before the effective transfer date, keep proof (cancelled checks, bank statements, payment confirmation) and expect the new servicer to account for it.
  • Escrow-account protection. If your loan has an escrow account for taxes or insurance, the servicer must transfer the escrow balance and provide information about any changes. You should receive an escrow account disclosure showing balances and any shortage or surplus.
  • Access to account history and statements. You have the right to request copies of mortgage statements, payment histories, and escrow analyses for the period around the transfer.
  • A complaint-resolution process and the ability to submit disputes in writing. Servicers must provide a way to raise errors and issues; you should document communications and ask for confirmation numbers.

(Authoritative sources: Consumer Financial Protection Bureau; Federal Trade Commission.)

Practical checklist: What to do immediately after a transfer notice

  1. Read the notice carefully. Confirm the effective transfer date, the new servicer’s name, mailing address, phone numbers, and any new website or online-account portal.
  2. Keep the notice in a safe place. Save an electronic copy and a printed copy in your mortgage folder.
  3. Continue making payments on time. Follow the payment instructions in the notice. If the notice is ambiguous, call both the old and new servicer and get written confirmation of where to send your next payment.
  4. Preserve proof of all payments. Keep bank statements, payment confirmations, canceled checks, screenshots of online payments, and copies of any certified-mail receipts. These are critical if payments go missing during the handoff.
  5. Verify autopay and recurring transfers. If you use automatic payments or autopay through your bank or the servicer’s portal, confirm whether you need to re-authorize the setup with the new servicer and check the timing so you don’t miss a payment or double-pay.
  6. Check your escrow statement. Confirm the new servicer’s escrow accounting and whether they transferred the escrow balance correctly. Ask for an escrow analysis and a detailed statement if anything looks off.
  7. Update contact information. Make sure your email, mailing address and phone number are correct so you receive future notices and billing statements.
  8. Request account documents. Ask both servicers for a payment history covering the transfer window and copies of any escrow statements.

Common problems and how to solve them

  • Payment posted late or to the wrong account: Provide proof of payment to the new servicer and request a correction. If the servicer refuses, document the dispute in writing and escalate. Keep copies of delivery confirmation (bank or mail). The CFPB accepts complaints about servicing problems and can help escalate unresolved cases (consumerfinance.gov).

  • Double billing or duplicate autopay: If you’re billed twice during the switch, contact the servicer immediately and ask for a refund of the duplicate charge. If the duplicate payment came from your bank’s automatic transfer, contact your bank for a reversal while you sort the loan-crediting issue.

  • Escrow shortfall or unexpected increase in payment: Ask for the escrow analysis that justifies the change. Servicers typically reconcile escrow accounts annually; a transfer can sometimes trigger recalculation. An itemized escrow statement will show what changed.

  • Loss of loan records or statements: Request copies from both servicers. If the old servicer claims records were transferred, ask for evidence. If key documents are missing, consider filing a complaint and keep a written timeline of events.

Special situations: FHA, VA and other government-backed loans

Borrowers with FHA, VA, USDA or other government-backed loans may have additional servicer protections or dedicated complaint channels through those agencies. For example, VA borrowers can contact the VA’s loan-guarantee servicer support if they suspect servicer mishandling. If you have one of these loan types, confirm whether the servicer change affects any government benefits, escrow rules, or loss-mitigation programs.

What a servicer cannot do because of a transfer

  • Change your original loan terms unilaterally (interest rate, principal, maturity) simply because the servicer changed. Only an authorized loan modification or refinancing can alter those terms.
  • Require immediate payment in full solely because of a transfer, absent a valid default that existed before the transfer and proper notice consistent with your promissory note and state law.

When to escalate: timing and routes

  • Contact the servicer’s written dispute/complaint department first and demand written confirmation of receipt.
  • If you can’t resolve the issue within 30–45 days, or if the servicer’s response is inadequate, file a complaint with the Consumer Financial Protection Bureau (cfpb.gov/complaint) and consider contacting your state’s attorney general or banking commissioner.
  • Keep careful notes of names, dates, and what each representative told you. If a servicer’s error harms your credit, you may need legal help; consult a housing counselor approved by HUD (hud.gov) or a consumer attorney.

Sample written dispute template (brief)

I am disputing the servicing error regarding payment(s) for loan account [account number]. On [date], I submitted payment of [$X] to [old servicer/new servicer] via [method]. Please correct my account to reflect timely payment and remove any related late fees. I have attached [proof: bank statement/confirmation/cancelled check]. Please confirm receipt of this dispute and the corrective action in writing.

Professional tips from practice

  • I advise clients to scan and timestamp every mailed or online payment confirmation around a transfer. That small habit resolves most transfer disputes quickly.
  • Request written payoff quotes if you’re planning a refinance during or shortly after a transfer — payoff figures can be miscommunicated during transitions.
  • Use secure mail (certified or tracked) if you must send paper checks during a transfer window.

When you may need professional help

If a servicer refuses to correct errors that lead to damaged credit reports, foreclosure risk, or improper fees, get help from a HUD-approved housing counselor or an attorney specializing in consumer finance. For systemic or unresolved problems, file a complaint with the CFPB and your state regulator.

Further reading and internal resources

Authoritative sources and where to get help

  • Consumer Financial Protection Bureau (CFPB): general guidance on loan servicing and how to file complaints — https://www.consumerfinance.gov
  • Federal Trade Commission (FTC): consumer protection resources and identity/financial fraud guidance — https://www.ftc.gov
  • U.S. Department of Housing and Urban Development (HUD): approved housing counselors and foreclosure-prevention help — https://www.hud.gov

Professional Disclaimer: This article provides general information and does not constitute legal or financial advice. For guidance about your specific loan, consult your servicer, a HUD-approved housing counselor, or a qualified attorney.

If you want, I can create a printable packet: a payment-proof checklist, sample letters, and a timeline template you can use during a servicing transfer.