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What to do if Your Mortgage Loan Servicing is Transferred

Your Mortgage Loan Servicing Rights

When you apply for a home mortgage, you may think that the lender, or loan originator, will service the loan until it is paid off or your house is sold. This is not always true. In today's market, mortgage servicing rights often are bought and sold.

If you are notified that your home mortgage servicing has been sold to another company, you may wonder how it will affect your loan terms and monthly payments. Some consumers have complained that they were not given enough notice of loan servicing transfers and were unfairly charged late fees and penalties.

Escrow Statements

The mortgage servicer collects your monthly payments and handles your escrow account. An escrow account is a fund that your lender establishes in order to pay property taxes and hazard insurance as they become due on your home during the year. The lender uses the escrow account to guard its investment in your home.

When your escrow account is first established, your mortgage servicer must give you a statement telling you the estimated taxes, insurance premiums and other charges that are anticipated over the next 12 months and the expected totals of those payments.

The mortgage servicer also is required to give you an annual statement that details the activity of your escrow account. This statement shows your account balance and reflects payments for property taxes and homeowners insurance.

What To Do If You Have a Complaint?

If you believe the mortgage loan servicer has not responded appropriately to your written inquiry, contact your local or state consumer protection office. You also should contact the Department of Housing and Urban Development (HUD) to file a complaint under the National Affordable Housing Act. Write: Office of Single Family Housing, HUD, Room 9282, Washington, DC 20410.

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