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I got a letter a couple of days ago from my mortgage company that the mortgage servicing has been transferred to another company as of 9/1. It says that my automatic payment has been cancelled, and that I should hear from the new company "soon" on how to pay. It says that if I don't I should send in my 9/1 payment with my current coupon and my old loan number to the new company. It says the new company won't accept payments until 9/1.

Usually I do ACH with the current servicer and prefer that to sending a payment. However, I don't have info to that with the new servicer and they say not to call the new servicer until 9/1 which is obviously too late for the 9/1 payment.

Since tomorrow is the 23rd I reluctant to wait beyond Saturday to do a payment by mail.

So, I'm thinking if I don't hear from the servicer by Friday to just go ahead and mail payment on Saturday. I do think it is strange that we haven't heard yet from the new servicer. Is this typical not to have heard by now?
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I got a letter a couple of days ago from my mortgage company that the mortgage servicing has been transferred to another company as of 9/1. It says that my automatic payment has been cancelled, and that I should hear from the new company "soon" on how to pay. It says that if I don't I should send in my 9/1 payment with my current coupon and my old loan number to the new company. It says the new company won't accept payments until 9/1.

Usually I do ACH with the current servicer and prefer that to sending a payment. However, I don't have info to that with the new servicer and they say not to call the new servicer until 9/1 which is obviously too late for the 9/1 payment.


I would go ahead and send the payment to the current servicer now, either using a push ACH from your bank account, or putting a check in the mail.

For most mortgage payments that are due on the 1st, there is a 15 day grace period. Most customers do not actually pay on or before the 1st, but do pay sometime during the grace period, so most customers would be making their Sep 1 payment after the new servicer started accepting payments on Sep 1.

The current servicer should accept mortgage payments at least until Aug 30 and will account for those payments when they transfer the loan to the new servicer. Even if the payment were to get to the current servicer after they stopped accepting payments, they would forward it to the new servicer, and you should not be charged any late fees or have any delinquencies noted on your credit report. RESPA requires that if the old servicer receives a timely payment for 2 months after the transfer, even if you should have sent the payment to the new servicer, it will be counted as on time, have no late fees and no impact to your credit report.

I do think it is strange that we haven't heard yet from the new servicer. Is this typical not to have heard by now?

I'd say it was pretty typical.

The current servicer is required to drop the notification of a servicer change in the mail to the customers no later than 15 days prior to the transfer. Because the current servicer doesn't want customers to send the payments that they are supposed to collect to the new servicer, the current servicer will usually wait until pretty close to the deadline to drop the letter in the mail.

The new servicer is required to drop the notification of a servicer change in the mail to the customers no later than 15 days after the transfer. Because the new servicer won't actually be able to help you with anything (including taking payments) until the information for your loan is loaded onto their systems, they generally will wait at least until the transfer occurs to send drop their letters in the mail.

AJ
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Awhile ago, it was a scam to send mortgage holders notice that there mortgage was being transferred when it wasn't. The "new" company cashed the checks and after a few weeks vanished.

If the automatic payment has been cancelled, it would be confirmation that the transfer is real. If there is any question, call your mortgage holder and verify the transfer.

As the previous post indicated, most mortgage payments are due on the 1st but not late until around the 15th. Your payment coupons may have that information.
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I would go ahead and send the payment to the current servicer now, either using a push ACH from your bank account, or putting a check in the mail.

For most mortgage payments that are due on the 1st, there is a 15 day grace period. Most customers do not actually pay on or before the 1st, but do pay sometime during the grace period, so most customers would be making their Sep 1 payment after the new servicer started accepting payments on Sep 1.

The current servicer should accept mortgage payments at least until Aug 30 and will account for those payments when they transfer the loan to the new servicer.



Here is what confuses me.

The letter is dated on August 15 and says the servicing will occur on September 1.

They say that any scheduled payments through their website will be cancelled effective August 31.


They say that the September 1 payment "must be made payable and sent to " new servicer and give the address.

They do say that the new servicer will begin accepting payment on September 1. However, they go on to say current servicer will accept payment up to and including August 31. They say that if we haven't received new payment information prior to the next due date (which in our case is 9/1) that we should forward our check with the current coupon and current loan number to the new servicer.

So, I am confused by this. Options:

1. I do have a paper statement received in the mail and I could send a check. I am in Texas, current servicer payment address is in Pennsylvania. Mailing on Saturday should get it there by August 31, but there can be delays in the mail.

2. I think I could make a one-time payment on current servicer's website. When I click on make a one-time payment it asks if I really want to since I have an active recurring schedule on 9/1. (No it hasn't been cancelled yet, but the letter says it will be cancelled effective 8/31).

3. I could do a bill payment from my bank which I would guess would go through as an electronic payment so would be fast. I don't know if it matters that I haven't done any transactions initiated from bank to the servicer (I've always made my payment as automatic debit from servicer's website).

4. I could mail a check to the new servicer (who is Oklahoma) but it likely arrives before 9/1 if I send it this Saturday.

Given these options - which one is the most likely to make this all go smoothly?
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Have you checked on the late payment date instead of the due date?

Two options:
1.) Cancelling the automatic payment and making a one-time payment on the current servicer's website would guarantee that the September payment is made by the due date and another payment isn't made.

2.) Waiting until 8/31 to mail a check to the new servicer. It would arrive after 9/1 and before the date the payment is considered late.
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I would say it's pretty typical as that's what happened to me.

When mine was getting switched, the notice said I could make a payment by ACH to my original servicer before the 1st of the next month and it would get credited/transferred to the new company, or I could wait until the 1st of the month and make a payment with the new company (for which I had a name, but I don't think I even had an address).

So I made my payment by ACH around the 25/26th with the original company. Then around the 1st or 2nd of the month I got a mailing from the new company, with directions on how to setup an online account - and if I hadn't made that month's payment I would have had 15 days to make it - instead of the standard 5 day grace period before it's considered "late".
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They do say that the new servicer will begin accepting payment on September 1. However, they go on to say current servicer will accept payment up to and including August 31.

Your payment is due Sept 1, but with the grace period, you probably have until Sept 16 (check your coupon to be sure) to make the payment without being charged a late fee.

Here's the key - don't get hung up on making sure that your payment gets to either servicer on or before Sept 1 - as already mentioned, you wouldn't be charged a late fee until probably after the 16th, depending on what your coupon says, and your payment would not be reported as 'late' to the credit bureaus until Oct 1. And since Sept 1 is a Sunday anyway - probably not a lot of payment activitiy is actually going to occur on Sept 1. Your previously mentioned concern that trying to work with the new servicer after Sept 1 is going to be 'too late' for the payment due Sept 1 is incorrect, because of the grace period.

So you have two options:

Pay the current servicer on or before Aug 31 - your Sept 1 payment will be processed by the current servicer and your loan will be sent to the new servicer with no payment due for Sept. If you are going to do this, I would suggest cancelling the automatic payment yourself (to be sure they don't pull it on Aug 30 or 31, because Sept 1 is a Sunday). You can either make a payment through their website, drop the payment in the mail to them, or send them a push payment from your bank, whichever you are most comfortable with.

Pay the new servicer on or after Sept 1, but on or before Sept 16 (or whatever your coupon says). You can follow the instructions in the letter, but I wouldn't drop the payment in the mail until Aug 30 at the earliest.

And, if you miss the date windows - it should still get resolved, but it may take a little while. If your payment gets to the old servicer after Sept 1, it will be forwarded to the new servicer. If your payment gets to the new servicer before Sept 1, they may hold it until they can process it, or they may send it back to the old servicer, depending on when they receive it. But to make things as smooth as possible, you should try to hit the appropriate timeframes.

AJ
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Payments aren't late until 9/16. I think I will cancel the 9/1 payment and pay at the current servicer's website (however, it doesn't make that much difference if I actually paid and then they pulled the automatic anyway. Payments are only $800 so if we made an extra payment it wouldn't be a big deal).
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OK, so a follow up question.

I did go ahead and make the September payment through the original servicer, well before the 9/1 date. I also cancelled my auto pay.

I did check Google and found numerous places where people had received similar notices of transfers of servicing from Servicer 1 to new Servicer 2.

I finally got notice from Servicer 2 on 9/16 and immediately set up electronic payment to begin on 10/1.

So, I thought I was basically done with this.

Then, today, I get in the mail a statement from Servicer 1 for the October statement! This is, of course, totally contrary to the letter saying the loan servicing had been transferred.

When I log into the website for Servicer 1, the first thing that I see is a notice that my loan has been transferred to Servicer 2 and that I don't have a mortgage with Servicer 1.

So, do I just ignore this paper statement I received or do I need to do more?
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Then, today, I get in the mail a statement from Servicer 1 for the October statement!

The October statement (showing activity relating to the October payment)? Or the September statement (showing activity related to the September payment) with a payment coupon requesting the payment due October 1?

I'm guessing it's the latter. If that's the case, it was probably triggered because you made the September payment to the old servicer, rather than the new servicer, and the old servicer had to send you a statement to acknowledge that they received the payment. Unfortunately, they don't seem to have a way to send that statement without including a coupon requesting the next month's payment.

So, do I just ignore this paper statement I received or do I need to do more?

Assuming that the statement properly credits you with the September payemnt, the new servicer properly shows that your September payment was made, and the principal balance shown by the new servicer is in agreement with what you expect it to be by having the September payment credited, you can ignore the paper statement.

If you want to be 'belt and suspenders' about it - you can call the old servicer and confirm that they really don't want a payment.

AJ
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Assuming that the statement properly credits you with the September payemnt,


Check

the new servicer properly shows that your September payment was made, and the principal balance shown by the new servicer is in agreement with what you expect it to be by having the September payment credited

Check
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