Definition
Your loan servicer is the company handling day-to-day loan administration—collecting payments, managing escrow, processing defaults. They're often different from the lender who originated your mortgage. Large servicers manage millions of loans.
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The loan servicer is often a different company from the lender who originated your mortgage. After the loan is sold to the secondary market (Fannie Mae, Freddie Mac, etc.), the servicer acts as the intermediary between you and the mortgage holder. Servicers collect payments, maintain escrow accounts for taxes and insurance, handle forbearance requests, and manage the foreclosure process if needed. Large servicers may manage millions of loans.
Pro Tip
Keep detailed records of your payments; servicer errors do happen, and documentation is essential if there are payment crediting issues.
Example
You obtain a mortgage from a local bank, but after 30 days, your payment mailing address changes to a large servicing company because the bank sold the loan to Fannie Mae.