Answers to Common Service Transfer Questions
What is a Service Transfer?
When a lender transfers servicing, they hand over the management of your loan to a new mortgage or servicing company. For the borrower, all this means is a new institution will be collecting your payments, handling your escrow accounts, dealing with any insurance or tax matters, and answering your questions.
Does this affect my loan terms?
No. The assignment, sale, or transfer of ownership of your mortgage loan does not affect any term or condition of the Mortgage, Deed of Trust, Deed to Secure Debt, or Note you signed. The transfer of ownership of the debt is or may be, recorded in the office of the public land records for the county or local jurisdiction where your property is located. This change will NOT impact your initial mortgage agreement – your principal loan amount, interest rate, and/or mortgage due date will remain the same.
Will my due date change?
No. This notice does not change how you are to repay your loan. Payments remain due on the 1st of each month. Please continue making your timely payment in keeping with prior instructions. If payments are not received by the 15th day after your due date, a late payment penalty may be applied.
Will my auto-payments transfer to the new servicer?
No, this service will not transfer. Please notify any third-party or other bill-paying service providers of the change in payee, loan number, and the new payment address.
What is an Escrow?
“Escrow” refers to a financial instrument, generally an account, held by a neutral third party on behalf of two parties engaged in a transaction. With an escrow account, the funds are held or managed by a third party until the transaction is complete or a contract is fulfilled.
When you close on a mortgage, your lender may set up a mortgage escrow account where part of your monthly loan payment is deposited to cover some of the costs associated with home ownership. The costs may include but are not limited to real estate taxes, insurance premiums, and private mortgage insurance.
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What Is A Homestead Exemption?
A homestead exemption is a type of property tax credit that can protect you and your home from creditors by shielding some or all assessed value on the land in question. This includes any buildings, structures (such as homes), fixtures/improvements—whatever touches the ground! It shields part way through an emergency situation where someone might need money ASAP but doesn’t have enough equity yet owed to get loans elsewhere without risk of being turned down due to lack of interest rates being too high already.
In the event of bankruptcy or death, a homestead exemption protects you and your home from property taxes. This means that it could help prevent any future financial problems if something were ever to happen with either one!
A homestead exemption can protect your home’s equity by:
- Pausing the forced sale of a property.
- Providing ongoing property tax relief for a surviving spouse, senior, disabled family member, veteran, or someone on active duty.
- Giving a surviving spouse temporary shelter and potential ongoing property tax relief.
A homestead exemption cannot:
- Stop a foreclosure after a mortgage default.
- Block a mechanics’ or mortgage liens.
- Stop foreclosure by the local government to collect unpaid property taxes.
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