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To determine how mortgage servicing companies work it’d first be best to be familiar with how mortgage servicing actually works.
Mortgage servicing is basically the word used for a corporation (sometimes the financial institution but this is certainly rare) that services your mortgage – This job involves maintenance of accurate balances and records, collecting payments from the borrower and sometimes even paying taxes and insurance.
Mortgage servicing companies also go after borrowers who default on their mortgage and seek to repossess their home.
It’s quite safe to assume that many borrowers are extremely disappointed when using the service component of their loan – Actually, recent research shows that as much as 90% of individuals are unhappy with their mortgage servicing company! An immense number.
Exactly why Do Mortgage Servicing Companies Perform so Poorly?
Good customer support is expected to be a given in this day and age – this obviously aids in repeat business but oddly, this incentive for service companies isn’t there.
The reason behind this would be that the mortgage servicing companies in many cases are in the shadows and the borrower doesn’t know who’s servicing their loan! They solely know who their lender or broker is. So even when they get a bad service, they will often leave but what is to say that their following mortgage is not going to have a poor performing service company behind it?
You see, the thing is that even the lenders don’t really care about the servicing aspect of the house loan. They’ve closed the deal and therefore they’ve got a buyer therefore it is unimportant for them to worry too much about servicing.
It’s no impact on the servicers finances whether they provide you a good service or a bad service this is why quality is indeed low and why the figure of unhappy mortgage borrowers is really high in relation to the servicing of their house loan!
Wait, it gets worse…As the borrower, you can not do away with your servicing company. The service provider is set by your loan company. The only way to be rid of poor mortgage servicing companies is to refinance with another loan company.
However, you only have a chance of 10% of discovering a service that you’re happy with so you should consider whether or not this is even worth the risk and hassle if this is the only reason you’re disappointed about your mortgage!
In the meantime, all that the customer really can do is hope and pray that these mortgage servicing companies will pull their finger out to provide a good service, as their name suggests, “service”. On this planet where money talks, though, should we really putting all of our eggs in such a very fragile basket?
I’d suggest, more realistically, learning to cope with their misgivings until someone does the correct thing and sorts these servicing companies out from top to bottom.
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Source by Al Kopping