What role does a loan servicing company play?

A loan servicing company primarily focuses on managing the administrative tasks associated with loan agreements after the funds have been disbursed. This includes the collection of mortgage payments, keeping track of payment histories, managing escrow accounts for property taxes and insurance, and providing customer service to borrowers. The role ensures that payments are processed accurately and timely, and it helps maintain communication with borrowers regarding their loan status.

Loan servicing is essential for the smooth functioning of the lending process, as it allows lenders to focus more on underwriting and loan origination while the servicing company handles the ongoing responsibilities associated with managing loans. The tasks performed by loan servicing companies are critical in maintaining borrower relations and ensuring compliance with loan terms.