What are mortgage servicing companies?

Most home buyers work with a lender to get a mortgage and finance their home purchase. However, some buyers are surprised to learn that the lender you got your mortgage from isn’t always who you’ll continue working with as you pay back the loan.

Once you close on your home, your mortgage servicer is your point of contact for anything related to paying off your mortgage. Your mortgage servicing company may not be the same lender that originally loaned you the money for a mortgage, and your servicer can change along the way.

Here’s a closer look at what mortgage servicing companies are and what they do so you’ll know what to expect as you pay off your home loan.

Mortgage servicing company definition

A mortgage servicer is a company that oversees the administrative tasks in connection with your mortgage after closing. This includes sending out statements, processing monthly mortgage payments, managing escrow accounts, and responding to questions.

Sometimes, your lender remains your servicer. It’s also not uncommon for your lender to sell your mortgage servicing rights to another entity, which gives them money to issue new loans. In this case, that company becomes your mortgage servicer.

Rocket Mortgage® proudly serves as both a lender and servicer of loans. In fact, some lenders have Rocket service the loans they originate.

Mortgage servicing companies are just one piece of the loan equation. Here are the prominent entities involved in a loan:

• Lender: The mortgage company that issues the loan
• Servicer: The company that administers the home loan
• Investor: A party that purchases home loans, such as Fannie Mae and Freddie Mac.
• Regulator: The agency ensuring that servicers follow federal protection laws and regulations

Mortgage lender vs. servicer

While they might sound similar, mortgage lenders and servicers play different roles in the mortgage and home buying process. The lender is the financial institution that loaned you the money, while the servicer is the one who handles your payments and day-to-day administration.

Mortgage lenders

To get a mortgage to buy a house, you’ll need to work with a lender. This could be a bank, credit union, or other financial institution that offers home loans.

When you apply for a mortgage, the lender will check your credit history and credit score and ask you to provide documentation showing you can pay back the loan. If you meet the lender’s requirements, they’ll preapprove you for an amount of money based on what your finances can handle. Then, once you find a house and make an offer, the lender will approve you for a mortgage amount based on what a professional appraiser says the home is worth.

When you close on your home, the lender will issue you the funds needed to complete the real estate transaction.

Servicers

Servicing takes place after you’ve closed and are the legal owner of your new home. Your servicer will issue your mortgage statements and you’ll make your monthly payment with them. Your original lender may do the servicing, or it may be handed off to a third party.

If the servicing rights to your loan are sold, you’ll be notified at closing or at least 15 days before your first payment with the new servicer is due. After the transfer, you’ll get a 60-day grace period during which you won’t be charged a late fee if you accidentally send your monthly payment to your former servicer instead of your new one.

When you’re transferred to a new servicer, your loan terms won’t change. Your interest rate, monthly payment, and loan balance will remain the same.

What do mortgage servicing companies do?

Mortgage servicing companies are responsible for managing your mortgage as you repay the loan. Here’s a breakdown of the responsibilities of your mortgage servicer.

Handle your payments and escrow

The primary job of your mortgage servicer is to issue mortgage payment statements and credit your account for each monthly payment you make. Your mortgage servicer also makes sure that each party that has a stake in your monthly payment gets paid. Several entities typically get a piece of each monthly mortgage you make, including:

• The owner of the loan: This is the lender or investor who owns the loan. Most lenders don’t hold onto their loans for the entire repayment term. Selling their loans to investors allows them to free up funds to issue more mortgages to prospective buyers.
• Your local government: Property taxes are typically paid to your local government as part of your monthly mortgage payment.
• Insurance companies: Lenders typically require that you have homeowners insurance to protect against losses and damage to your property. Depending on your loan type and down payment amount, you may also be required to purchase mortgage insurance to protect the lender. Depending on where you live, you may opt to buy flood insurance coverage as well.
• The servicer itself: Mortgage servicers are paid from a portion of your monthly mortgage payment. It’s possible you could also have to pay additional servicing fees or late fees, but you typically won’t need to worry about a separate payment.

Your servicer will typically pay these entities out of an escrow account on your behalf when your payments are due.

Each year, your servicer will send you an escrow statement detailing all the payments made from the account and letting you know if you owe money for a shortage. The statement will also note any aspects of the account that will change in the coming year.

Answer loan questions

Your servicer will also be your source if you have any questions related to your loan. For example, you might be wondering if you’re now eligible to cancel mortgage insurance. If you’re looking to make addition principal balance payments, your servicer can let you know how.

Most servicers offer convenient phone and online support options. At Rocket Mortgage®, we also provide 24/7 self-service, phone lines for new and existing clients, and an option to chat online. If you’re a Rocket Mortgage customer, don’t hesitate to reach out to us with any questions.

Provide loss mitigation options

If you are struggling to keep up with your mortgage payments, it’s important to communicate with your servicer. They can help you figure out your loss mitigation options against loan delinquencies to help you avoid foreclosure.

For example, they may offer a loan modification to help you reduce your monthly payment. While this may mean extending your loan term and paying more overall, you’ll end up with a monthly payment you can afford and be able to keep your home. Another common loss mitigation option is mortgage forbearance, which allows you to temporarily pause your mortgage payments. If foreclosure becomes necessary, your servicer will be the one to initiate it.

If you’re a Rocket Mortgage customer and you’re having trouble keeping up with your payments, you can learn more about your loss mitigation options here.

How to find your mortgage servicing company

If you’re wondering who your current mortgage servicer is, check your mortgage statements and other recent paperwork. You can also use the Mortgage Electronic Registration Systems (MERS) website to identify the servicer associated with your mortgage.

Can your mortgage servicer change?

It’s not uncommon for your loan to be sold to a different mortgage servicer in what is known as a servicing transfer. According Mr. Cooper hundreds of thousands of mortgages get transferred each year. Lenders and other servicers transfer mortgages to focus more on origination or reduce risk with the amount of debt they’re holding.

If your mortgage gets transferred, you’ll have a new servicer who will handle your payments and questions. You’ll be notified at least 15 days before the transfer and you’ll be provided with the information you need about your new servicing company.

If your mortgage has been transferred to Rocket Mortgage, we’re happy to have you. You can learn more on our Welcome page.

Can you choose your servicer?

Buyers can’t typically control who services their loan. You can choose your lender or refinance to change lenders, but you can’t choose your servicer. The only exception is if you choose a lender that also handles its servicing. Rocket Mortgage services almost all of the loans we originate, except for jumbo loans.

What Rocket Mortgage offers as a servicer

Since your servicer manages your mortgage over the life of your loan, it’s important to have a good servicer that you’re happy with. Some of the perks of having Rocket Mortgage service your loan include:

• Fewer servicing fees
• No payment fee
• Several payment options
• 24/7 customer portal for self-service
• Helpful mobile app
• Rocket Assist interactive chat
• Interactive Voice Response (IVR) phone system
• Superior client excellence
• J.D. Power Mortgage Servicer Satisfaction awards¹

In addition to our self-service options, Rocket also has team members available to help clients in a variety of methods including chat, phone, and email. You can talk to us in the mode you’re most comfortable with. Rocket has a variety of teams trained in specialized processes to ensure there is always an expert to help with any client question.

At Rocket, we’re committed to clarify and truth in how we approach client situations and tough conversations. We aim to create a safe space for how our clients are feeling and offer solutions that are adaptable and relevant to each client’s situation.

The bottom line: Your mortgage servicer is a crucial point of contact

After closing on your home, your mortgage servicer will be in charge of handling your loan as you pay it back. Your servicer will issue statements, collect monthly payments, manage your escrow accounts, and field any questions you have. It’s likely your mortgage servicer may change along the way, but you’ll be notified at least 15 days in advance. If your servicer does change, you’ll want to be certain you’re sending payments to the right company.

Ready to begin a mortgage application? Get started online with Rocket Mortgage.

¹ Rocket Mortgage has won more awards than any other brand in the J.D. Power U.S. Mortgage Servicer Satisfaction Studies between 2002 – 2025. Visit JDPower.com/Awards for more information.