Part I: Mortgage Definitions
A Mortgage Lender is a financial institution that lends money for the purpose of purchasing a home or refinancing an existing loan.
A Mortgage Servicer handles the day-to-day tasks of managing loans. The mortgage servicer typically processes loan payments, responds to borrower inquiries, keeps track of principal and interest paid, and manages escrow/impounds accounts.
A Subservicer is a company that has contracted with a lender or servicer to perform on-going servicing activities on behalf of the Lender.
Mortgage Escrow/Impounds Account
This is an account maintained by the Mortgage Servicer, in order to pay certain property related expenses on your behalf. The deposits into this account come from your total mortgage payment. *Please note not all mortgage payments include escrow/impounds. Reference your monthly mortgage statement to see if your mortgage payment includes escrows/impounds.
Mortgage Payment PITI
“PITI” is an acronym that refers to the various components of a mortgage payment.
P = “Principal” is the portion of a monthly mortgage payment which is applied to the outstanding balance of the loan.
I = “Interest” is the portion of a monthly mortgage payment which is considered the finance charge for money being borrowed.
T = “Taxes” is the portion of a monthly mortgage payment which is set aside to pay the real estate taxes owed for a property when they become due. *Please note not all mortgage payments include real estate taxes. Reference your monthly mortgage statement to see if your mortgage payment includes real estate taxes.
I = “Insurance” is the portion of a monthly mortgage payment which is set aside to pay the homeowners’ insurance premium when it becomes due. *Please note not all mortgage payments include homeowners insurance. Reference your monthly mortgage statement to see if your mortgage payment includes homeowners insurance.
Private Mortgage Insurance
PMI is arranged by the lender and provided by private insurance companies. PMI is usually required when you have a loan and make a down payment of less than 20 percent of the home’s purchase price. Only the Lender or Servicer can make a claim on this type of insurance.
Part II: Mortgage Servicing FAQ
What does a transfer of mortgage servicing mean?
When you take out a mortgage with a mortgage company or a bank, there is always a possibility that the lender will sell or transfer the servicing of your loan to another institution. Servicing means the collection of payments and management of operational procedures related to mortgages. When servicing is sold, another lender or company will be taking your payments, handling your escrow accounts, and answering your questions. This can happen at any point.
I received a Transfer Letter. What does this letter mean?
A transfer letter is a notification required by the Real Estate Settlement Act Procedures (RESPA) which advises borrowers that the management and/or ownership of their loan has been transferred. The letter also provides important information such as payment address and contact information for the new Servicer.
How will this affect my escrow account?
Any remaining escrow balance will be transferred to the new servicer. An escrow analysis is typically conducted annually. Once the escrow analysis is completed, you will be notified by the servicer if there will be any adjustments to your monthly escrow payments based on any increase or decrease in your tax bill or homeowner’s insurance premium (hazard insurance).
I received a delinquent tax or homeowner’s insurance bill, but I have an escrow account. What should I do?
Please give your current servicer a call to discuss the documentation you received.
What happens if I send my payment to the wrong address?
If a payment is received at an incorrect payment-processing center, it will either be routed to the correct payment center for processing or returned to you. If you are unsure where to send your payment, please contact the servicer listed on your monthly billing statement to ensure your payment is posted in a timely manner.
Who may I contact at HarborOne Mortgage with my question after my loan closes?
We are here to help! Our Servicing Specialists are available by phone at 844-818-0901 Monday through Friday 8:30 to 5:00 OR by e-mail at email@example.com.