Mortgage Lender vs. Loan Servicer: What’s the Difference?
Like a waiter at a restaurant, a loan servicer is the one who interacts with you, telling you what you owe and collecting your money, while a lender is like the cook in the kitchen whom you might not see. A mortgage lender provides the money you need to purchase a home and a loan servicer collects your monthly payments. Both roles can be performed by the same company, just like how a cook can double as your waiter, but the roles are often done by different companies.
What are the key differences between a lender vs. a servicer?
The mortgage lender is the financial institution — the bank, credit union, online lender or person — who ponies up the cash that you use to buy a home.
|Mortgage lender||Mortgage servicer|
The loan servicer deals with all of the paperwork, accounting and correspondence with you after the contract is signed. They can answer your questions and help you solve problems if any come up. It’s also the company you contact if you’re having trouble paying your mortgage.
Your lender may be the same as your servicer. Sometimes lenders will do all the work of collecting payments themselves. Other times, they find it easier to hire another company to do that work.
How do I see who my lender or servicer is?
You can find both your mortgage lender and loan servicer names on your mortgage payment coupon book and your mortgage bills. (Here’s how to read a mortgage statement.) If those aren’t handy, you can use the Mortgage Electronic Registration Systems (MERS) by going to its website or calling (888) 679-6377. It’s a public database that tracks most U.S. mortgages.
You’ll need to share some basic information like the borrower’s name and address to get the right mortgage details. Anyone can find out who the mortgage servicer is for your home, but you’ll only be able to see who the lender is if you’re the borrower and you input your last name and Social Security number (SSN) or Tax Identification number (TIN).
What happens if my servicer changes?
If your servicer changes during your loan, you should receive a letter from both the old servicer and the new one, telling you what’s going on.
When your loan servicer changes, you’ll need to change who you make payments to. If you pay by check each month, you’ll need to make it out to a different name and mail it to a different address. If you make payments electronically or automatically, you’ll need to switch things there.
Can I change my mortgage loan servicer?
You can’t change your loan servicer — your lender is in charge of that. They pick the loan servicing company they want to work with. If you’re having problems with the servicer, communicate directly with the servicer and keep records.
You can escalate unsolved issues to:
- Your local consumer protection office
- Your state attorney general
- The Federal Trade Commission’s Bureau of Consumer Protection
- The Consumer Financial Protection Bureau (CFPB)
Any or all of those organizations should be able to provide guidance. You can also look into changing your lender by refinancing your home. Be careful though and ask whether your new lender uses the same loan servicer if you decide to go this route.