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You think after getting through the stressful shopping and closing process that you are done. Paying the mortgage is never an issue right?

Wrong!

We have comment after comment on mortgage servicing companies. And they are not good. People are beyond frustrated at the lack of service (ironic right) and communication these companies have.

Mortgage Servicing Definition

Servicing is the act or “service” of collecting your payments, reporting mortgage payment history to credit reporting agencies, and administering your escrow payments of taxes and insurance for a fee the lender pays.

Some mortgage servicing companies only service mortgages. Others only service the mortgages they originate to save the fee.

You have absolutely no choice in who services your mortgage. The servicing rights are usually bought and sold several times over the life of the loan. The only way you would potentially stay with the same servicer is if you get a mortgage from a small, local bank.

So many people have complained about payments not being posted on time and late payments reported to credit reporting agencies. Obviously, late fees are a huge profit center for a servicer.

If they “lose” your payment for a while they get to charge you a late fee. They also report late mortgage payments to the credit reporting agencies.

They are also notoriously late in alerting you if your escrows are changing. If your taxes went up, your escrow part of your payment also needs to increase. But some mortgage servicing companies sit around while you are going in the whole every month and then…

Bam!

Out of the blue, you get a notice your payment is increasing by $300 a month to make up for a shortfall in your escrow account. Pay attention to your tax bill and insurance premium. If they are not on the ball, at least you can be. Start saving the extra amount needed to cover the increase because they will catch it sooner or later.

The only way you can get away from a servicer is to refinance. But then you could end up back at the same one. It just depends on who is selling the servicing and who is buying it. So that is certainly not a foolproof option.

To protect yourself from any payment monkey business get a cashier’s check from the bank and send your payment via UPS or FedEx so the servicer will have to sign for it and you have a paper trail to show a credit reporting agency should any problems arise. You could also get your payment automatically withdrawn from your bank account if they offer that service.

Read all the comments on our mortgage servicing reviews. You can find PHH Mortgage, EMC Mortgage Servicing, American Home Mortgage Servicing and many, many others.

Author: Terri Ewing

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