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The loan servicers are sitting right between the homeowners and the investors who have bought the loans from the market in form of bonds or mortgage-backed securities.\u00a0<\/b><\/p>
The loan servicers are the single point of contact for the borrowers concerning their mortgage issues and queries once the home loan is closed by the lender.\u00a0<\/b><\/p>
The mortgage servicer will collect the mortgage payments from the borrower and pass those payments to the homeowner\u2019s insurance company, tax departments, and the investors through the escrow account.<\/b><\/p>
The mortgage loan servicer plays a significant role in assisting borrowers that are unable to make their mortgage payments by finding a way to keep them current on their mortgage and avoid losing their homes to foreclosure.\u00a0<\/b><\/p>
The loan servicers also work towards securing the inventor\u2019s interest in the mortgaged property.<\/b><\/p>
Once the loan is closed by the lender, they will decide which loan servicing company will service the loan.\u00a0<\/b><\/p>
Some lenders service their loans; whereas other lenders will sell the servicing rights to a third-party company.<\/b><\/p>
The mortgage loan servicers receive a fixed percentage of the unpaid principal balance and keep a certain amount of fees that they charge the borrowers.\u00a0<\/b><\/p>
Loan servicing fees are charged to the borrowers where they are making the payments on time and also if the payments are missed by the borrower. Usually, the loans with missed payments are very low in number.\u00a0<\/b><\/p>
However, during the financial crisis, millions of homeowners were delinquent and needed assistance from their loan servicers.\u00a0<\/b><\/p>
The loan servicers did not have enough manpower and technology to help assist these homeowners at the time.<\/b><\/p>
When a homeowner defaults on a loan, it is the loan servicer\u2019s responsibility to get the loan to its current status.\u00a0<\/b><\/p>
The first job of the loan servicer, in this case, is to ensure that the homeowner is not losing his\/her home. There are many ways to help such homeowners like forbearance, repayment plans, or loan modification.\u00a0<\/b><\/p>
If none of the options work, the loan servicing company can initiate a short sale of the home, a deed in lieu of foreclosure, or a foreclosure.<\/b><\/p>
For the foreclosed properties, the loan servicer will have to take responsibility for maintaining the property by making necessary repairs and ensuring that the property stays in good condition until it is purchased by another buyer.\u00a0<\/b><\/p>
Maintaining the property will help keep the value of the home at its best and also avoid an unsafe environment in the neighborhood.<\/b><\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t