Mortgage Servicing Transfer 2026: What to Do When Your Loan Gets Sold
You just got a letter in the mail: "Your mortgage has been transferred to [New Company Name]. Please send future payments to..."
Wait-can they just DO that? Sell your loan without asking? The short answer: Yes. And it happens to 73% of mortgages within the first 3 years (Freddie Mac, 2025).
But here's what most people don't know: Your loan terms don't change. Your rate, payment, and balance stay exactly the same. What DOES change is who you send payments to-and that's where things can get messy if you're not careful. Here's exactly what to do (and what NOT to do) when your mortgage gets sold.
What Is a Mortgage Servicing Transfer? (And Why It Happens)
Let's clear up the confusion: Your mortgage itself didn't get sold. Your loan terms (rate, balance, payment) are locked in a contract that can't change.
What got sold is the servicing rights-the right to collect your payments, manage your escrow, and handle customer service. Think of it like this:
The Restaurant Analogy
Imagine you have a gift card to Restaurant A. One day, Restaurant A sells the gift card program to Restaurant B. Your gift card balance doesn't change. The value doesn't change. But now you redeem it at Restaurant B instead.
Same concept with mortgages: Your loan balance, rate, and terms stay identical. You just send payments to a different address now.
Why Do Lenders Sell Servicing Rights?
Three main reasons:
1. Cash Flow Management
Servicing rights are valuable assets. Selling them generates immediate cash that lenders can use to originate new loans. It's like selling future revenue streams for upfront capital.
2. Specialization
Some companies specialize in originating loans (getting you approved), while others specialize in servicing (collecting payments, managing escrow). They trade servicing rights to focus on their strengths.
3. Regulatory Requirements
Banks must maintain certain capital reserves. Selling servicing rights reduces their liabilities, freeing up capital to meet regulatory requirements.
Bottom line: It's a normal business practice. Your lender isn't "getting rid of you"-they're managing their portfolio. But that doesn't mean you have to accept poor service from the new company. If you're unhappy, you can refinance to a lender you trust.
What Changes (And What Doesn't) When Your Loan Transfers
| Feature | Changes? | Details |
|---|---|---|
| Interest Rate | NO | Locked in your original loan contract |
| Monthly Payment | NO | Same principal + interest amount |
| Loan Balance | NO | Transfers exactly as-is |
| Loan Term | NO | 15-year, 30-year, etc. stays same |
| Escrow Account | NO | Balance transfers to new servicer |
| Payment Address | YES | New servicer provides new address/portal |
| Customer Service | YES | New phone number, website, portal |
| Auto-Pay Setup | YES | Must re-enroll with new servicer |
Key takeaway: Your loan terms are bulletproof. But the logistics (where you pay, who you call) change completely. That's why the 60-day grace period exists-to give you time to update everything without penalty.
Tired of Servicer Transfers? Lock in a Stable Lender
Some lenders rarely sell servicing rights. If stability matters to you, refinancing to one of these lenders could save you future headaches (and potentially lower your rate).
- ✓Compare lenders who keep servicing in-house
- ✓See if you can lower your rate simultaneously
- ✓Free quotes • No credit impact • 3 minutes
Your Rights Under RESPA (Real Estate Settlement Procedures Act)
Federal law protects you during servicing transfers. Here's what your old AND new servicer MUST do:
📬 Right #1: 15-Day Advance Notice
Your OLD servicer must notify you at least 15 days before the transfer date. The notice must include:
- Name and contact info of new servicer
- Transfer effective date
- New payment address
- Toll-free customer service number
🛡️ Right #2: 60-Day Grace Period
If you accidentally send a payment to your OLD servicer during the first 60 days after transfer, you cannot be charged a late fee. The old servicer must forward your payment to the new one.
Pro tip: This doesn't mean you SHOULD keep paying the old servicer-it's just protection if you forget to update auto-pay.
📞 Right #3: Qualified Written Request (QWR)
If the new servicer makes an error (wrong balance, missing escrow, etc.), you can file a Qualified Written Request. They MUST:
- Acknowledge your request within 5 business days
- Investigate and respond within 30 business days
- Fix any errors or explain why there's no error
Send QWRs via certified mail to create a paper trail. Include your loan number, property address, and detailed description of the issue.
💰 Right #4: Escrow Account Protection
Your escrow balance (for property taxes and insurance) transfers to the new servicer in full. They cannot:
- Reduce your escrow balance
- Charge you to transfer the escrow
- Require a new escrow analysis immediately (must wait until annual review)
What to Do When You Get the Transfer Notice (7-Step Action Plan)
Verify the Transfer Is Legitimate
Scam alert: Fraudsters send fake transfer notices to steal payments. Before doing anything:
- Call your CURRENT servicer (use the number on your last statement, NOT the letter)
- Confirm the transfer is real and the new servicer name matches
- Check the CFPB's complaint database for the new servicer's reputation
Update Auto-Pay IMMEDIATELY
This is the #1 cause of missed payments during transfers. Do this within 24 hours of receiving the notice:
- Cancel auto-pay with old servicer
- Set up new auto-pay with new servicer (wait for their welcome packet with account details)
- Make your first payment MANUALLY to ensure it goes through
Verify Your Loan Details Transferred Correctly
Once you get access to the new servicer's portal, check:
- Loan balance: Should match your last statement from old servicer
- Interest rate: Must be identical
- Escrow balance: Should transfer in full
- Payment history: All past payments should show
If ANYTHING is wrong, file a Qualified Written Request immediately.
Update Your Records
Save yourself future headaches:
- Update your password manager with new login credentials
- Save the new customer service number in your phone
- File the transfer notice with your mortgage documents
- Update your tax records (if you deduct mortgage interest)
Monitor Your Credit Report
Servicing transfers sometimes cause credit reporting errors. Check your credit report 30-60 days after transfer to ensure:
- No duplicate mortgage accounts showing
- Payment history transferred correctly
- No false late payments reported
Keep Paying on Time (Even If Confused)
If you're unsure where to send a payment during the transition, pay the NEW servicer (they're legally responsible as of the transfer date). The 60-day grace period protects you if you accidentally pay the old one, but don't rely on it.
Consider Refinancing If You're Unhappy
If the new servicer has terrible reviews, poor customer service, or you just want stability, refinancing to a lender who keeps servicing in-house might be worth it-especially if you can lower your rate simultaneously.
5 Common Problems During Servicing Transfers (And How to Fix Them)
❌ Problem #1: Payment Lost in Transition
Scenario: You sent a payment to the old servicer, but the new servicer says they never received it.
Fix: Contact the OLD servicer with proof of payment (bank statement, check image). They're required to forward it within 2 business days. If they don't, file a complaint with the CFPB.
❌ Problem #2: Escrow Balance Incorrect
Scenario: Your escrow balance shows $2,000 less with the new servicer than it should.
Fix: File a Qualified Written Request with documentation from your old servicer showing the correct balance. The new servicer must investigate within 30 days and correct any errors.
❌ Problem #3: False Late Payment Reported
Scenario: The new servicer reports you as 30 days late because they claim they didn't receive your payment (but you paid on time to the old servicer).
Fix: Dispute with all 3 credit bureaus immediately. Provide proof you paid the old servicer within the 60-day grace period. The new servicer must remove the late payment.
❌ Problem #4: Auto-Pay Double Charge
Scenario: Both the old AND new servicer charged you in the same month because you didn't cancel auto-pay fast enough.
Fix: Contact the old servicer for a refund. They're required to return overpayments within 20 business days. If they refuse, file a CFPB complaint.
❌ Problem #5: New Servicer Has Terrible Customer Service
Scenario: The new servicer has 1-star reviews, 2-hour hold times, and a confusing website.
Fix: You can't force them to sell your loan back, but you CAN refinance to a lender with better service. If rates have dropped since your original loan, you might even save money.
Frequently Asked Questions
Can I refuse a mortgage servicing transfer?
No. Your original loan agreement allows the lender to sell servicing rights without your consent. However, your loan terms (rate, payment, balance) cannot change. If you're unhappy with the new servicer, your only option is to refinance to a different lender.
Will my interest rate change when my loan transfers?
No. Your interest rate is locked in your original promissory note and cannot be changed by a servicing transfer. If the new servicer tries to change your rate, that's illegal-contact the CFPB immediately.
What happens to my escrow account during a transfer?
Your escrow balance transfers to the new servicer in full. They'll continue paying your property taxes and homeowners insurance on schedule. You should receive an escrow statement from the new servicer within 60 days showing the transferred balance.
How do I know if the transfer notice is a scam?
Red flags: Requests for immediate payment, unfamiliar company name, or instructions to wire money. Always verify by calling your CURRENT servicer (use the number on your last statement, not the letter). Legitimate transfers are also announced on your current servicer's website.
Can I be charged a late fee if I pay the wrong servicer during the transition?
No-not during the first 60 days after transfer. RESPA's 60-day grace period protects you from late fees if you accidentally send a payment to the old servicer. However, don't rely on this-update your payment method immediately to avoid confusion.
Frustrated with Constant Servicer Changes?
Some lenders keep servicing in-house and rarely transfer loans. If stability matters to you, see if refinancing makes sense-especially with rates at 6.01% (Feb 2026).
✓ No credit check • ✓ See lenders who keep servicing • ✓ 3-minute process
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The Bottom Line
Mortgage servicing transfers are normal-73% of loans transfer within 3 years. Your loan terms don't change, but the logistics do. The key is acting fast: verify the transfer is real, update auto-pay immediately, and check that all your loan details transferred correctly.
Federal law protects you with a 60-day grace period and the right to dispute errors. But if you're tired of the uncertainty, refinancing to a lender who keeps servicing in-house could give you the stability you want-and potentially save you money if rates have dropped.
Don't let a servicing transfer catch you off guard. Follow the 7-step action plan above, know your rights, and you'll navigate the transition smoothly.
Disclosure: This article contains affiliate links. We may earn a commission if you apply through our links, at no extra cost to you. All information is accurate as of February 21, 2026. Mortgage servicing transfer rules are governed by RESPA (Real Estate Settlement Procedures Act).