If you just got a letter saying your loan is moving to a new company, nothing is wrong with your account. The reason your mortgage is being transferred is almost always a routine business decision: lenders sell loans on the secondary market to free up money for new lending, and they hand off day-to-day account management to companies that specialize in servicing. Federal law keeps your loan terms intact through the change and gives you a 60-day cushion so a misdirected payment cannot hurt you.
Why Lenders Sell and Transfer Mortgages
A mortgage locks up a large amount of a lender’s money for as long as 30 years. Rather than wait decades to get that capital back, most lenders sell their loans shortly after closing. The sale returns cash the lender can use to fund the next borrower’s mortgage, which is how the housing market keeps moving. A loan sitting on the books is money that cannot be lent again.
Selling also spreads risk. Holding thousands of long-term loans exposes a bank to interest-rate swings, borrower defaults, and capital requirements set by regulators. Transferring loans to investors or to government-sponsored enterprises like Fannie Mae and Freddie Mac pushes that risk across a wider pool. That is why a loan you closed with a local bank last year can end up owned by a national investor and serviced by a company you have never heard of.
What Actually Changed: Ownership or Servicing
Two different roles exist on every mortgage, and a transfer can affect one or both. The loan owner holds the promissory note and the legal right to be repaid. That owner might be a private investor, a bank, or an entity like Fannie Mae, which remains the owner of the notes it purchases regardless of who handles account management.1Fannie Mae. A2-1-05, Note Holder Status for Legal Proceedings Conducted in the Servicers Name
The servicer is the company you actually deal with. Servicers collect your monthly payments, manage your escrow account for taxes and insurance, and send your statements.2Office of the Law Revision Counsel. 12 USC 2605 – Servicing of Mortgage Loans and Administration of Escrow Accounts A transfer can mean the ownership changed, the servicing changed, or both changed at once. In some arrangements a master servicer owns the right to service the loan while a subservicer does the work on its behalf,3eCFR. Subpart C – Mortgage Servicing which is one reason the name on your statement can change without anything else about the loan changing.
Your Loan Terms Cannot Change
A transfer gives the new company no authority to rewrite your mortgage. Your interest rate, principal balance, monthly payment, and maturity date stay exactly what you agreed to in the original promissory note and deed of trust. The new company steps into the shoes of the old one and is bound by the same contract.
That protection covers loan modifications too. Any modification you negotiated with the previous servicer must be honored. Federal regulation requires that all rights and protections you had before a transfer continue afterward, and if you had a loss mitigation application pending on the transfer date, the new servicer has to pick up the evaluation under the same deadlines that applied to the old one.4Consumer Financial Protection Bureau. 12 CFR 1024.41 – Loss Mitigation Procedures The old servicer is also required to hand over every document and record related to your loan so nothing is lost in the handoff.5eCFR. 12 CFR 1024.38 – General Servicing Policies, Procedures, and Requirements
The Notices You Should Receive
Federal law requires written notice before and after a servicing transfer. Under the Real Estate Settlement Procedures Act, your current servicer sends a goodbye letter at least 15 days before the transfer takes effect, and the new servicer sends a hello letter no more than 15 days after.2Office of the Law Revision Counsel. 12 USC 2605 – Servicing of Mortgage Loans and Administration of Escrow Accounts The two companies can combine those into a single joint notice, but it still has to arrive at least 15 days before the transfer date.6GovInfo. 12 CFR 1024.33 – Mortgage Servicing Transfers
Each notice must include the new servicer’s name, address, and toll-free phone number, along with the date the old servicer stops accepting payments and the date the new servicer begins.2Office of the Law Revision Counsel. 12 USC 2605 – Servicing of Mortgage Loans and Administration of Escrow Accounts Keep both letters. They are your proof of the timeline if a dispute comes up later.
When the ownership of the loan changes and not just the servicer, a separate rule applies. Any entity that acquires more than one mortgage loan in a 12-month period must notify you of the ownership change within 30 calendar days.7GovInfo. 12 CFR 1026.39 – Mortgage Transfer Disclosures So a single transfer can generate letters from both the servicing side and the ownership side. Getting more than one notice about the same event is normal.
Payment Protection During the Switch
The most important protection during a transfer is a 60-day grace period. For 60 days after the effective transfer date, the new servicer cannot charge you a late fee if you accidentally send a payment to the old servicer on time. That misdirected payment also cannot be reported as late to the credit bureaus or treated as delinquent.2Office of the Law Revision Counsel. 12 USC 2605 – Servicing of Mortgage Loans and Administration of Escrow Accounts Update your payment information as soon as the notices arrive, but know that a good-faith mistake in those first two months will not cost you.
Autopay and Bill Pay
If you pay through automatic bank drafts or your bank’s bill-pay service, expect that setup to end when the transfer takes effect. The old servicer usually cancels autopay authorizations as part of the transition, and the new servicer will require you to enroll again. Check the transfer letters for enrollment instructions and confirm with your bank that any scheduled payments are redirected. Not re-enrolling is one of the most common reasons a payment gets missed after a servicing change.
Escrow Balances
Your escrow balance for property taxes and insurance transfers with the loan. The old servicer has to send you an escrow account statement within 60 days of the transfer, covering the period from your last annual statement through the transfer date.8Consumer Financial Protection Bureau. 12 CFR 1024.17 – Escrow Accounts Compare that closing statement against the first statement from the new servicer to make sure the balance carried over correctly. If the numbers do not match, call the new servicer right away. An escrow shortfall can push your monthly payment up.
Confirm the New Servicer Is Real
Transfer letters can look convincing even when they are fraudulent. Before you send money to a new company, take a few minutes to confirm the change independently. The strongest first step is to call your previous servicer using the phone number on your most recent statement, not any number printed on the new letter, and ask them to confirm the transfer.
Several free tools can also confirm who owns or services your loan:
- The Mortgage Electronic Registration Systems (MERS) website tracks servicer and ownership information for many mortgages.9Consumer Financial Protection Bureau. How Can I Tell Who Owns My Mortgage
- Fannie Mae and Freddie Mac each run lookup tools that let you search by address and the last four digits of your Social Security number to confirm ownership.10Freddie Mac. Loan Look-Up Tool
- NMLS Consumer Access lets you search by company name or license number to confirm a servicer is properly registered with state regulators.11NMLS Consumer Access. NMLS Consumer Access
- You can send your servicer a written request for the name, address, and phone number of the loan’s owner. Federal law requires them to respond.9Consumer Financial Protection Bureau. How Can I Tell Who Owns My Mortgage
If anything in the transfer notice does not check out, whether a mismatched company name, an unfamiliar payment portal, or an unusually urgent demand, do not send money until you have confirmed the transfer through one of these channels.
Fixing Errors After the Transfer
Payments can be misapplied, escrow balances can get miscounted, and account histories sometimes arrive incomplete. If you spot a mistake after the transfer, federal law gives you a formal way to fix it. Send a written notice of error to your servicer that includes your name, information identifying your loan account, and a description of the problem. Send it to the address the servicer designates for that purpose, which is usually listed on your monthly statement, not on a payment coupon. The servicer must acknowledge your notice in writing within five business days and then either correct the error or explain in writing why it believes no error occurred, generally within 30 business days.12eCFR. 12 CFR 1024.35 – Error Resolution Procedures
If the servicer misses the deadlines or refuses to resolve the issue, file a complaint with the Consumer Financial Protection Bureau online or by calling (855) 411-2372.13Consumer Financial Protection Bureau. My Mortgage Servicer Has Not Responded to a Notice of Error or Information Request That I Sent – What Can I Do The CFPB forwards complaints to servicers and tracks the responses. Filing does not guarantee a particular outcome, but it creates an official record and often produces a faster resolution.
Two 1098s at Tax Time
When your mortgage transfers partway through the year, expect two Form 1098s the following January, one from each servicer. Each reports the mortgage interest it collected during the part of the year it held your loan. The new servicer’s 1098 will also show the date it acquired the loan and the outstanding principal balance as of that date.14Internal Revenue Service. Instructions for Form 1098 (Rev. December 2026) Add the interest amounts from both forms when you file to claim your full mortgage interest deduction, and keep both with your tax records in case a total does not match your own payment history.