What happens if I receive a Loan Servicing Change notice?
At the time you acquire your home loan (whether by way of a home purchase or refinance) your loan is assigned to a specific loan servicer. This loan servicer fulfills the duties of sending you monthly mortgage statements, managing payments, handling escrow/impound accounts, sending you year-end summaries, etc...Essentially all functions related to the ongoing management of your home loan.
On occasion, the duties related to servicing your loan can be transferred to a new loan servicer. If this happens with your loan, you will be sent a Notice of Transfer of Servicing Rights. This document informs you that the servicer on your home loan has changed and payments now need to be sent to the new servicer.
NOTE: nothing changes in regards to the terms on your loan. Only the payee for your mortgage payments is changed. Your interest rate, payment, and other related loan terms all remain the same unless you make a change by refinancing or selling the home. Essentially all that changes is where you send your payments!
Upon a loan servicing change, you simply need to ensure future payments are directed to the new servicer. Also, by law there is a grace period where the old servicer has to accept payments for at least a month after the change, in order to help with the transition. As such, the old servicer will direct received payments to the new servicer, so as to avoid late payments for you (should you send payments to the old servicer after the transfer).
Feel free to contact us regarding this, or any other home loan & tax questions...we’re happy to help!