Mortgage Definitions: Servicing

Many times there is confusion when buying a home of whom you will pay in the end. The use of a broker is very common and when we use a broker to help us obtain a mortgage our loan is sold. The broker may obtain the loan for you through Acme wholesale and Acme will promptly sell that debt to an investor. That investor may or may not service the loan. They may have someone else service the loan. So what is Servicing?

Servicing – The collection of mortgage payments from borrowers and related responsibilities of a loan servicer.

If you are like me that leaves me asking the question then what is a servicer?

Servicer – An organization that collects principal and interest payments from borrowers and manages borrowers’ escrow accounts. The servicer often services mortgages that have been purchased by an investor in the secondary mortgage market.

So in the most layman’s term possible servicing and a servicer is the debt collector. This is where you will send your payment and all correspondence about that payment will be made directly through this company.