Mortgage Servicing

Mortgage Servicing

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Your monthly mortgage payments are handled by what is known as a mortgage servicer. The mortgage servicer is responsible for collecting your monthly payments and handling your escrow account.


Your escrow account is a special account held in your name to pay obligations such as property taxes, insurance premiums and other escrow items. The mortgage servicer uses the funds from your escrow account to insure that these expenses are paid in a timely fashion. This avoids the risk of having lapsed insurance coverage or delinquent taxes. And it gives you the peace of mind of knowing that you won’t have to make large lump sum payments during the course of the year.

 

At the time the escrow account is established, your mortgage servicer is required to provide you with a statement of estimated expenses and the expected total of those expenses for the next 12 months.

 

Each year thereafter, the mortgage servicer is required to provide a statement that outlines what portion of your mortgage payments were applied to principle, interest, taxes, insurance, and other escrow items. The annual statement also details any adjustments in payments to cover taxes, insurance and other escrow items.


During the course of your loan, your mortgage servicing company may change. Prior to a change, your current mortgage servicer must notify you in writing with the effective date the first mortgage payment is due at the new mortgage servicer’s office.  You should also receive notification from your new mortgage servicer. These notifications should include:

 

  • Name and address of the new mortgage servicer.
  • The last date your current mortgage servicer will be accepting your mortgage payments. 
  • The date your new mortgage servicer will begin accepting payments.
  • Free or collect telephone numbers to call for more information about the transfer of service for both your current and new mortgage servicers.
  • Notice of whether you may continue any option insurance (such as disability insurance).  Also what action, if any, you have to take to maintain coverage.  As well as whether the insurance terms will change.

 

In the event that your mortgage servicer changes, the new servicer is required to honor the terms and conditions of your original mortgage agreement. This requirement’s exception is the terms and conditions related directly to servicing the loan.

 

Following the transfer, you’ll have a 60 day grace period in which you cannot be charged a late fee if you mistakenly send your mortgage payment to the old servicer rather than the new one. 

 

If you have any questions or disputes with the new servicer, contact your servicer in writing. Continue to make your monthly payments while your dispute is settled.  The servicer is required to investigate disputes and make any necessary corrections within 60 business days.

Don't Forget a Mortgage Tune-up!

Give your mortgage an annual once over.

If the last time you looked at your mortgage was when you closed on your loan, it’s time to take it out for an annual once over. New loan programs and opportunities to leverage your home equity can bring you lower mortga

Is a fixed rate mortgage the best choice for you?

Many of us opt for the certainty of a 20 year or 30 year fixed rate mortgage when we get our first mortgage. If you anticipate selling your home within the next 10 years, one of our new hybrid loans may be a better financial fit for you. Hybrid loans typically have a lower fixed rate than a traditional 20 or 30 year mortgage. The savings you receive can well be worth switching to a hybrid loan.

Are your taxes and insurance up to date?

Even though your mortgage servicer is responsible for paying your taxes and insurance out of your escrow account, it just makes sense to periodically check to see that these payments are being made properly. While you’re at it, you’ll want to review your homeowner’s insurance policy. It’s a good idea to review your policy every two to three years to make sure it covers recent home improvements, replacement costs for the contents of your home, and that its reconstruction coverage is keeping pace with inflation.

Do you have a Home Equity Line of Credit (HELOC) for emergencies?

Many homeowners are making the proactive choice to secure a Home Equity Line of Credit (HELOC) for emergencies.  A HELOC is a revolving line of credit that only charges interest when you actually draw money from the line of credit. As you repay the balance of the draw, the credit becomes available again. Securing a HELOC in advance can be a great help if you’re ever laid off or have an unexpected medical or other emergency.

How’s your credit report?

The information in your credit report has a huge impact on whether or not you will again qualify for a mortgage loan.  That’s why it’s important to periodically check your credit report.

 

Now it’s even easy to do so. A recent amendment to the federal Fair Credit Reporting Act (FCRA) mandates that each credit reporting company provide you with a free copy of your credit report, at your request, once a year. To request your free credit report, visit http://www.annualcreditreport.com (Free reports are being phased in over a nine-month period, rolling from the west coast to the east beginningDecember 1, 2004.  By September 1, 2005, free reports will be accessible to all consumers.)

Are you making the most of your home’s equity?

With rising home prices, you may have more equity in your home than you realize.  Taking out a home equity loan to payoff credit card debt, car loans and other higher interest debts makes good financial sense.

Is it time to refinance?

The timing might be right to refinance your mortgage loan.  New rates may help you significantly lower your monthly payment. Or you might want to “cash out” some of the built-up equity in your home, which you can use to consolidate debt, improve your home, take a vacation - whatever! Perhaps by refinancing you can even pay off your mortgage sooner! 

 

We'll work with you to determine if the timing is right to change your loan program, considering your cash on hand, how likely you are to sell your home in the near future, and what effect refinancing might have on your future plans.

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