What are the differences between a lender and a mortgage servicer?

A lender and a mortgage servicer are two different entities in the mortgage process in California. A lender, such as a bank, is the person or institution that originally lends the money for the housing purchase. The mortgage servicer is the company that collects payments on the mortgage from the borrower. The lender holds the legal mortgage document that is signed by the borrower at the closing. This allows the lender to foreclose in the event of delinquency. The lender also has the right to add a borrower to the title of a property. The mortgage servicer administers the loan and handles collections. The servicers’ job is to make sure payments are received and kept current. They are responsible for sending out statements, processing payments and handling escrow accounts. Mortgage servicers must follow certain rules and regulations set down by the Federal government and the California state banking authority. A lender, on the other hand, is not required to follow these same rules as long as their loan is in good standing. The lender and the mortgage servicer both have very important roles to play in the mortgage process. The lender has the ultimate say in deciding whether the borrower will receive a loan, while the servicer is in charge of making sure borrowers keep up with their payments. Together, both the lender and the servicer protect the borrower and the lender’s investment in their property.

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