Consider a Mortgage Loan Servicing Company

Consider a Mortgage Loan Servicing Company to service the loan and collect loan payments
Loan servicing includes collecting payments from borrowers, disbursing payments to lenders or note holders, mailing appropriate notices, monitoring the status of senior liens and encumbrances, maintaining adequate insurance coverage, and coordinating foreclosure proceedings if necessary.

In the case of individual mortgages, private lenders and note holders decide whether to handle the loan servicing themselves or to authorize a servicing agent by written agreement. Many mortgage brokers will request delivery of the original promissory note and mortgage to the servicing agent to be held on behalf of the lenders or note holders during the term of the servicing agreement. In some cases, the mortgage loan broker may be the servicing agent.

Benefits of a Mortgage Loan Servicing Agreement A loan servicing agreement provides a great value to investors because it allows a servicing officer to collect on a mortgage and a note on their behalf.

Not only is this an effective means of collecting on a mortgage and note, but it brings more peace of mind to the investor when there is an expert third party involved.

When an investor makes the decision to involve a well established, reputable third party, the investor has no direct involvement in enforcement of the agreement. The borrower benefits because she simply has to send a single payment to the servicing firm instead of multiple payees.

A loan servicing agreement is beneficial because it:

  • Relieves investor from responsibility for monthly billing and maintenance to get regular payments
  • Eliminates the need for the investor to directly enforce loan agreement terms
  • Leverages the experience of loan servicing officers to resolve customer service issues for borrowers

Understanding the Loan Servicing Process

Depending on the agreement, basic responsibilities and duties fulfilled by the loan servicing officer might include:

  • Bills the borrower, collects monthly payment, deposits funds received into investor's escrow account
  • Issues the appropriate checks to the investor
  • Mails monthly statements and an interest earned check to the investor
  • Maintains the payments records and issues 1099 form for tax purposes
  • Makes all telephone and written communication to borrowers and investors
  • Starts foreclosure in the event of a default by borrower
  • Schedules in-house legal counsel available to assist investor during foreclosure process

For further information please contact: Jorge Garcia-Pulido, President/CEO 305-796-4799

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