What Is a Loan Servicer?

A loan servicer plays a vital role in the mortgage process. Here are the basics of what a loan servicer is and what tasks one performs.

Loan Servicer

A loan servicer is a company that performs administrative tasks on mortgage loans. They will start handling the administration of the loan immediately after the loan is created. Every mortgage that is written has a loan servicer that handles responsibilities associated with it.


Loan servicers handle a number of different tasks that are associated with mortgages. These companies will send up all of the monthly statements that are associated with your mortgage. They will also collect the monthly mortgage payments that you send in and record them appropriately on your account. One of their most important responsibilities is handling the escrow accounts that come with the mortgage. They will take part of the money from your payment and distribute it to the proper escrow account. Then, when your taxes or insurance are due, they will distribute the payments from the escrow account. If your account becomes delinquent, they will also send correspondence to you and follow up on the delinquency.


These companies will receive a percentage of your mortgage payment for their services. In most cases, it will be between .25 and .5 percent.