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

In Virginia, there are several key distinctions between lenders and mortgage servicers. A lender is the entity that originates or provides the loan for the purchase of a home. This includes banks, credit unions, and other lending institutions. They administer the loan funding and have the right to collect payments from the borrower. A mortgage servicer, on the other hand, is a third-party organization that manages the loan after it has been funded. This includes collecting payments on behalf of the lender, remitting payments to the lender, and managing the loan documents. Mortgage servicers can also offer certain services such as loan modifications and foreclosure prevention. The most important distinction between lenders and mortgage servicers is that lenders are responsible for ensuring the loan is in good standing and for recovering any missed payments from the borrower. Mortgage servicers are responsible for the administrative duties of the loan, such as collecting payments and remitting them to the lender. In summary, lenders are responsible for the origination of the loan and the collection of any missed payments. Mortgage servicers manage the loan on behalf of the lender and offer additional services such as loan modifications and foreclosure prevention.

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

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