Overview

When a loan servicer transfers your account, the new company becomes responsible for receiving payments, maintaining records (including escrow accounts for mortgages), and answering account questions. Transfers happen for many reasons — the lender sold a loan portfolio, a servicer outsourced servicing to a specialist, or a loan was moved as part of corporate consolidation. The transfer does not automatically change the legal terms of your loan agreement unless you’ve also agreed to a loan modification.

Legal notices and borrower protections

Federal rules require servicers to notify borrowers in writing when mortgage servicing transfers occur and to provide contact details for the new servicer. These protections are covered under mortgage servicing rules enforced by the Consumer Financial Protection Bureau and related federal law. For the latest guidance, see the CFPB’s resources on loan servicing and protections for borrowers (consumerfinance.gov) and the FTC’s Truth in Lending materials for how servicing relates to loan terms.

Step-by-step: What to do when you get a transfer notice

  1. Read the notice carefully — confirm the effective transfer date, the new servicer’s contact information, your account number, and where to send payments.
  2. Verify authenticity — confirm both the old and new servicers’ phone numbers and websites independently (don’t use contact info from a suspicious email). Scammers sometimes mimic transfer notices.
  3. Continue making payments on time — keep paying the party specified in the notice until you get written confirmation that the new servicer received the payment and credited it to your account.
  4. Preserve records — save the transfer notice, your payment records (bank statements, canceled checks), and any correspondence. These are essential if a payment crediting error occurs.
  5. Update autopay carefully — do not cancel automatic payments with the old servicer until you confirm the new servicer has your account set up and you receive a written confirmation of the change. When switching autopay, note the timing to avoid duplicate payments.
  6. Confirm escrow details (mortgages) — ask how your escrow (impound) account, tax and insurance payments, and any balance will transfer. Request an escrow account statement from the old servicer and a schedule from the new servicer.
  7. Watch statements and credit reporting — review your first two billing statements from the new servicer and monitor your credit report for unusual entries.

Escrow transfers and taxes

When mortgages transfer, escrow (impound) accounts must also move correctly. Ask the old servicer for a final escrow accounting showing disbursements and the balance that will be transferred. If a balance is due, the notice should explain timing for payment. See our related explainer on how escrow accounts work for more context and what to watch for: Mortgage Loans: How Escrow Accounts Work. Also read about differences between impounds and no-escrow loans to understand possible changes: Mortgage Impounds vs No-Escrow Loans: What Borrowers Lose or Gain.

Common problems and how to fix them

  • Missing or late credit for a payment: Provide proof of payment to both servicers and request correction in writing. Keep copies of bank statements and canceled checks.
  • Duplicate payments: If you accidentally paid both servicers, request a refund from the second servicer and ask for a written correction to your account balance.
  • Escrow shortages or misapplied funds: Request a detailed escrow accounting and, if needed, file a written dispute with the servicer. If the servicer fails to resolve errors, you can submit a complaint to the CFPB.

When to escalate

If your servicer doesn’t respond, won’t correct a clear error, or you suspect fraud, escalate to:

  • The Consumer Financial Protection Bureau (file an online complaint at consumerfinance.gov).
  • State banking or financial regulators (search your state’s agency for mortgage/loan servicing complaints).
  • A housing counselor approved by HUD for mortgage-related issues.

Practical tips from experience

In my lending work I’ve seen most transfers proceed smoothly when borrowers keep payments current and document interactions. Small actions — saving the transfer notice, confirming account numbers, and timing autopay changes — prevent the majority of headaches.

Authoritative resources and further reading

  • Consumer Financial Protection Bureau — loan servicing and borrower protections (consumerfinance.gov)
  • Federal Trade Commission — Truth in Lending and consumer protections (ftc.gov)

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Professional disclaimer

This article is educational and not individualized legal or financial advice. For decisions about your loan, contact your servicer, a licensed attorney, or a certified financial counselor.