Mortgage servicing pages explain what happens after the loan closes and the borrower begins making payments. This section is about the company that manages the day-to-day loan account, payment processing, and escrow administration.
Start with Mortgage Servicer to understand the difference between the company that originated the loan and the company that may later handle the ongoing account.
Then read Payment Due Date, Grace Period, Late Fee, Partial Payment, Suspense Account, Servicing Transfer, Escrow Shortage, Escrow Surplus, and Payoff Statement to understand the account issues borrowers often see after closing.
This section also covers Escrow Analysis, Escrow Cushion, Mortgage Statement, Force-Placed Insurance, Mortgage Recast, and Principal Curtailment, which explain how the account is monitored, communicated, and sometimes reshaped after the loan is already in place.
In this section
- Mortgage Servicer
A mortgage servicer is the company that manages the loan account after closing, including payment collection and escrow administration.
- Servicing Transfer
A servicing transfer occurs when the day-to-day management of a mortgage account moves from one servicer to another.
- Escrow Shortage
An escrow shortage means the escrow account does not contain enough money to cover the expected taxes and insurance bills.
- Escrow Surplus
An escrow surplus means the escrow account holds more money than is needed for projected taxes and insurance obligations.
- Payoff Statement
A payoff statement shows the amount required to fully pay off a mortgage as of a specific date.
- Payment Due Date
Payment due date is the calendar date on which the monthly mortgage payment is contractually due.
- Late Fee
A late fee is a charge that may be added when a required mortgage payment is not made on time under the loan and servicing rules.
- Grace Period
Grace period is the short period after the mortgage payment due date when a payment may still avoid a late fee.
- Escrow Analysis
Escrow analysis is the servicer's review of the escrow account to determine whether projected taxes and insurance collections are sufficient.
- Mortgage Statement
A mortgage statement is the regular account statement showing the borrower's payment amount, balance details, and servicing information.
- Partial Payment
A partial payment is a mortgage payment that is less than the full amount required to bring the account current for that due date.
- Suspense Account
A suspense account is a holding account a servicer may use for funds received but not yet applied to the mortgage obligation.
- Force-Placed Insurance
Force-placed insurance is coverage obtained by the servicer or lender when required property insurance appears to be missing or lapsed.
- Mortgage Recast
A mortgage recast is a payment recalculation on an existing loan after a large principal reduction, without replacing the original mortgage.
- Principal Curtailment
A principal curtailment is an extra payment applied directly to reduce the mortgage principal balance.
- Escrow Cushion
An escrow cushion is the extra amount maintained in an escrow account beyond the immediately projected bills to help prevent shortages.