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Can I Change My Mortgage Loan Servicer?

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In a Nutshell

Borrowers cannot generally change their mortgage loan servicers unless they refinance. Even then, servicers may change at any time without a borrower's permission. It is important for homeowners to know their rights when it comes to dealing with mortgage servicers.

Written by Attorney Todd Carney
Updated November 29, 2021

Managing a loan can be tough. After you’ve already made a large down payment, you then need to make monthly payments on top of all of your other expenses. The situation can become even worse when you have a difficult mortgage service lender. Maybe the way they notify you about payments is problematic or they get some information wrong. This all can lead you to ask, “Can I switch my mortgage loan servicer?” Generally, you can’t. But your servicers may change without your approval. 

Even though you don’t generally get a say in who services your mortgage loan, you should know all of your rights so you can prevent issues with your house payment or, worst-case, foreclosure. This article will walk you through how changes in mortgage loan servicers can occur and what your rights are.

Can a Borrower Choose Their Mortgage Loan Servicer?

To put it simply, no, you can’t choose your loan servicer. While most homeowners choose their lender when they get a mortgage loan, those loans are often transferred or sold later on to a mortgage servicing company that manages the loan. You can choose your lender, but not your servicer.

The one exception would be if you change loans, also known as refinancing. But this is an indirect way of changing your servicer and may not achieve what you ultimately want. When you refinance, it can take your mortgage away from the servicer you’ve had issues with. But you still won’t have a say in who services your refinanced loan. Your refinanced loan could even end up with the servicer you were trying to get away from.

Servicer vs. Lender

It may seem like a mortgage lender and mortgage servicer are the same thing, but there are some key differences. A mortgage lender is a financial institution, like a bank or credit union. The lender is the entity that loans you the money you need to purchase your house. They will start the real estate loan by reviewing your credit report or FICO score, along with your assets and any additional information needed for approval. They also provide the underwriting of the mortgage, then process the relevant paperwork and ultimately give you the money.

A mortgage servicer, on the other hand, is an organization or company that oversees your loan after closing. They will typically send you monthly mortgage statements and monitor and process your loan payments. If it’s relevant, they will also manage your escrow account, which helps pay your homeowners insurance and property taxes. A mortgage loan service company also deals with any questions or concerns homeowners have regarding their loans. 

If you’re struggling to make your mortgage payments, you’ll turn to your mortgage servicer to see what your loss mitigation options are. Loss mitigation options like forbearance or loan modification will help you avoid foreclosure. A mortgage servicer also manages your property if you abandon it.

Your lender may also be your mortgage servicer, but this is often not the case. Even so, the lender has the first option to service the mortgage loan. It can also hold on to the loan but have a third party service it. Or it can outright sell the loan completely. Your lender and servicer may start as the same company. But this may later change because financial institutions frequently buy and sell mortgages. For example, Fannie Mae and Freddie Mac will purchase home loans, combine them with securities, and then sell those securities to investors.

Your mortgage may be sold multiple times throughout the life of your loan. Each time this happens, the financial entity that buys the loan can choose to service the loan itself or get a third party to handle it. This all leaves you without any way to choose or even approve your servicer. That said, by law, you must be notified of these changes.

You probably shouldn’t refinance your loan just because you’ve had issues with your servicer. You should generally only refinance when it is financially realistic and to your benefit. For example, if your credit score has increased because you’ve worked to repair your credit, you could qualify for a loan with more favorable terms, such as a lower interest rate, smaller monthly payment, or a shorter loan term.

How Do You Know Who Your Current Mortgage Servicer Is?

You can find out who your servicer is by looking at your monthly mortgage statement. The company’s information should be listed there. You can also search the Mortgage Electronic Registration System (MERS) to see if your mortgage servicer is listed there.

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Servicing Transfer Rules Require That You Be Notified

When your mortgage goes to a new loan servicing company, both your current servicer and your new one will provide you with a disclaimer about the change. The law requires your current servicer to provide you with notice no later than 15 days before the formal transfer of the mortgage. Your new servicer must provide you notice no later than 15 days after the transfer.

The two notices should include:

  • When the transfer will occur (this will likely be the due date of your first payment to the new servicer).

  • Both servicers’ addresses, names, and phone numbers.

  • When your old mortgage servicer will no longer accept mortgage payments.

  • When your new mortgage servicer will start to accept payments.

  • If the transfer impacts any of your elective coverage and, if so, how you can maintain your coverage.

  • An explanation of how the change won’t impact the terms of your loan, besides ones regarding loan servicing.

Additionally, you have the right to a 60-day grace period, starting from the transfer date, where your new mortgage loan service company isn’t allowed to charge you a late fee if you accidentally send a mortgage payment to the previous servicer.

If the new servicer changes your escrow account in a way that impacts how much you owe each month, they need to send you a statement on the new calculations of the escrow account no later than 60 days after the transfer date. If the new servicer doesn’t change your escrow account, they are free to use the calculations of your old servicer.

It’s important to note that if you haven’t received a statement indicating a change in mortgage servicing companies from your current servicer but you receive a notice from a new one claiming to be your new servicer, you should reach out to your current servicer to verify the change. Doing so will help ensure you aren’t paying a loan to someone who claims to be your new servicer but actually isn’t. Unfortunately, there are sometimes mortgage servicing scams like this.

If You Have an Issue With Your Loan Servicer

Though you can’t choose your mortgage servicer, that doesn’t mean you have to just deal with the issues you may have with them. You still have legal protections. If you have any problems with your servicer, start by reaching out to them by phone, mail, or email and describing your issue. Make sure you provide your name, account number, and contact information. If you’re sending an online letter, you can use an online template from the Consumer Financial Protection Bureau (CFPB).

When you reach out to them using a letter, the servicer is required to notify you in writing that they have gotten your letter within five days of receiving it. They need to respond within 30 days of receiving your letter that outlines how to resolve the issue. If you can’t resolve your issue, it’s a good idea to consider filing an online complaint with the Office of the Comptrollers of the Currency (OCC) or the CFPB.

Let’s Summarize…

You aren’t able to change your mortgage loan service company without refinancing, and even then, there’s no guarantee you’ll receive a new one. At the end of the day, lenders frequently buy and sell loans and also hire third parties to service mortgage loans, all of which you won’t have any say in. Given this reality, it’s a bad idea to refinance with a new lender in hopes of changing servicers because there’s always a chance you could end up with the same one. You should only refinance if it’s going to get you more favorable mortgage rates.

If any issues come up with your current servicer, you should reach out to them. If you can’t settle the issue, then you should get in touch with the CFPB or the OCC.

Written By:

Attorney Todd Carney


Attorney Todd Carney is a writer and graduate of Harvard Law School. While in law school, Todd worked in a clinic that helped pro-bono clients file for bankruptcy. Todd also studied several aspects of how the law impacts consumers. Todd has written over 40 articles for sites such... read more about Attorney Todd Carney

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