Can I Change My Mortgage Loan Servicer?
A lot of research goes into choosing a mortgage lender. There are reviews to read, interest rates to compare, fees to analyze. Let’s not forget your rapport with the loan officer. You want someone you can trust, someone who has your best interests top of mind and someone who can guide you through the right options.
So, it’s an incredible feeling when you find the right fit: a well-respected lender with a responsive and dedicated loan officer. It’s the start of a beautiful long-term relationship. Until you realize, at no fault of your own, it’s not guaranteed to be a long-term relationship.
Why is that?
Well, after your loan closes, your mortgage servicer is the company that manages your loan and collects payments. It may or may not be the lender that initially gave you a loan. If it isn’t the same lender, you may feel disappointed and want to know, “what can I do to change my mortgage loan servicer?” The answer is direct, but not simple.
Understand the mortgage process
First things first, it’s important to understand the mortgage process and its key players. The process begins with what’s called a mortgage origination period (including your mortgage application through your funded loan). During the origination period, you interact with a loan officer, mortgage processor, and underwriter.
After your loan has funded, it moves to the servicing stage, which (again), is where you receive ongoing mortgage statements and escrow analyses. These documents may come from the mortgage lender you chose to do business with (mortgage originator), or they may come from another lender in the event your loan is sold or transferred.
Keep in mind, a change this significant doesn’t happen overnight without any notification. There are laws in place to protect borrowers during this transition (more on that in the next section).
Did you know? Fannie Mae and Freddie Mac purchase home loans from lenders, package them into securities, and sell the securities to investors. By doing this, they provide a continuous flow of affordable home financing that results in the availability of mortgage credit for low- and moderate-income Americans.*
*We are not affiliated with Fannie Mae or Freddie Mac.
Mortgage servicing transfer rules
It’s very common for mortgages to transfer at some point during the loan term. Unfortunately for you, no law says you can approve the transfer or interview potential servicers first. Instead, you receive a goodbye letter within 15 days of the next due payment. That letter names your new servicer, along with the date the new company will begin accepting payments. You’ll also receive a welcome letter that corroborates the transfer and tells you where to send future payments.
Tip: To find out who your servicer is, check your monthly mortgage statement. Or try the MERS® Servicer Identification System.
How to change mortgage loan servicers
Now for the direct answer. The only way to change mortgage servicers is to refinance your loan and move to a lender that services the loans they originate. Keep in mind, just because a company services a loan today it doesn’t mean they’ll continue to do so long term. The industry is always changing.
Don’t put yourself through a mortgage refinance if your only reason is to change mortgage servicers. Make sure there are other refinance benefits you can take advantage of, like: a lower interest rate, shorter loan term, access to cash, debt consolidation, or dropping private mortgage insurance (PMI).
Tip: If refinancing makes sense for your financial situation, know that you can work with the loan officer who originated your loan. It’s (back to being) your choice when you refinance your mortgage.