of America, LLC

Most important, you are not the customer for a mortgage service company. Their primary purpose is to collect money for the owner of the mortgage loan.  many companies will do everything they can to collect money from you.

There are 3 significant departments in most mortgage service companies concerned with delinquent mortgages.  Each has a different objective.  They generally operate independent of each other.  Often, all three departments will communicate with the borrower at the same time.  Most often, their efforts are uncoordinated and some times conflicting.

• Collection Department   The function of this department is to get the borrower to send money.  Some departments will employ every technique possible convince the borrower to make a payment.  Pressure, intimidation, fear, insult, emotional distress are used by some collection departments.
• Loss Mitigation Department   The purpose of this department is to identify a way to save the property from a foreclosure sale and limit the potential loss for the owner of the mortgage loan.  For many departments, helping the property owner is an unintentional outcome in the process.  Loan modification and short sale are two techniques employed by this department to limit the loss for the owner of the mortgage loan.
• Foreclosure Department   The primary objective of this department is to exercise the legal right of the mortgage loan owner to holder to gain ownership of the property and/or the right to sell the property and use the proceeds to pay off the mortgage.   An attorney will represent the mortgage loan owner and initiate a foreclosure action.

A mortgage service company is different from a mortgage originating company even if they share the same 'brand name'.  For example, Wells Fargo Mortgage Service Company is a collection company and Wells Fargo Bank is a bank that makes mortgages.   They are different companies even though they share a similar name. 

A mortgage servicing company is a company that services the daily maintenance of a mortgage loan. In many cases, after a loan is taken out, and even if that loan is eventually sold to another bank or financial institution, the day-to-day operations is often handed over to another company. In taking this responsibility, the mortgage servicing company gets to take a small percentage of the interest payment, perhaps half a percent.

After a payment is received, the mortgage servicing company, or loan servicing company, credits those payments and then sends out a new statement. In some cases, the mortgage servicing company used may change several times during the life of the loan. However, while the mortgage servicing company may change, the bank may that receives the bulk of the payment may stay the same.

In the United States, if the mortgage servicing company does change the borrower has some rights that go along with that. First, notification must be made 15 days in advance of the change. Also, the grace period is extended just in case the borrower sends a payment to the previous company. This grace period is 60 days. These provisions are detailed in U.S. federal law and cannot be amended by the mortgage servicing company.

In most cases, the processing of mortgages is good business. Most people make their payments each month on time, or may be slightly late from time to time. Further, with improvements in technology, the processing and maintenance of a loan is becoming increasingly automated. This is made possible by things such as electronic payments.

However, the expense for a mortgage servicing company increases dramatically once a borrower fails to pay consistently on time because the company then must pursue collections. In some cases, this is successful, but still represents an additional expense for the company. If collections are needed, the mortgage servicing company may have an agreement worked out with the mortgage holder to receive additional fees, up to 100 percent of the late fee, and maybe even more than that, depending on the amount of work involved.

If not successful with collections, the mortgage servicing company must then work with the holder of the mortgage to determine the next steps in the process. That may include, but not be limited to loan modification, short sale or foreclosure. The mortgage servicing company could handle a foreclosure or leave that responsibility to the bank, depending on the agreement between the two entities