During the U.S. mortgage process, you may receive a notice informing you that your loan servicer has changed—meaning your mortgage is transferred from Company A to Company B.
This is very common and usually happens due to:
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Loan sales
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Servicing rights transfers
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Internal bank or lender restructuring
π€ Common Concerns from Borrowers
Many borrowers ask:
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“What if I accidentally send my payment to the old servicer?”
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“Will it be considered late?”
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“Will it affect my credit score?”
π The good news: federal law provides clear protection.
✅ Federal Protection: 60-Day Grace Period (Very Important)
Under Regulation X (12 CFR §1024.33(c)(1)), the following protections apply:
Within 60 days after the servicer transfer becomes effective,
if you make your payment on or before the original due date (including any grace period)
and mistakenly send it to the previous servicer:
✔ The payment will NOT be considered late
✔ No late fees may be charged
✔ No negative credit reporting is allowed
✔ Your credit score will NOT be impacted
π§Ώ Example
Assume your mortgage servicer officially transfers on May 1:
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You send your May payment to the old servicer on May 15
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Even though the old company is no longer servicing your loan
π The payment is still valid and will not be treated as late.
π What Happens to the Payment?
Federal law clearly defines how the old servicer must handle misdirected payments
(Regulation X §1024.33(c)(2)).
The prior servicer must do one of the following:
| Option | What Happens |
|---|---|
| ✅ Forward the payment | The funds are transferred and credited to the new servicer |
| ✅ Refund the borrower | The payment is returned and you (or the new servicer) are notified |
π« The old servicer is NOT allowed to hold the payment without action.
π― Practical Tips for Borrowers (Highly Recommended)
Although the law provides a 60-day protection window, the best approach is to avoid confusion altogether:
✔ Update your payment method immediately
Once you receive the transfer notice:
⚠️ Auto-pay does NOT transfer automatically — manual updates are required.
✔ Keep payment records
Retain documentation for at least 90 days, including:
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Bank withdrawal confirmations
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Check copies or scans
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Emails or screenshots from the servicer’s online portal
π‘ Extra Tips
If you’re concerned about payment timing during the transfer month, you may consider:
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Paying the monthly amount early
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Temporarily disabling auto-pay and paying manually
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Calling both the old and new servicers to confirm receipt and posting
π Our Professional Recommendation
As a mortgage advisory team, we strongly recommend:
π Contact us as soon as you receive a servicer transfer notice
We can help you:
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✅ Verify the notice is legitimate (fraud prevention ⚠️)
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✅ Confirm correct payment instructions
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✅ Guide you through updating accounts and payment settings
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✅ Assist with resolving any servicing or posting issues
π Your mortgage security and credit score matter — we’re here to protect both πͺ