What is the difference between a Lender and a Servicer?
• Each mortgage loan has two components: the right of the investor to receive the principal and interest repayments due on the Mortgage Note, known as the Mortgage Rights; and, the right to collect the payments for principal and interest along with collecting the payments for taxes and insurance on the mortgage and the obligation to make those payments when they are due, referred to as the Servicing Rights. The Servicer is the entity that owns the Servicing Rights to a mortgage and is the entity to whom you make your monthly payments. A Lender originates the mortgage loan and may act as the Investor and the Servicer. Quite often, the Lender will elect to sell the Mortgage Rights to another Investor and to sell the Servicing Rights to a third party. You may have heard of the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”). These entities are quasi-government agencies that are the largest investors of mortgage loans in th
• Each mortgage loan has two components: the right of the investor to receive the principal and interest repayments due on the Mortgage Note, known as the Mortgage Rights; and, the right to collect the payments for principal and interest along with collecting the payments for taxes and insurance on the mortgage and the obligation to make those payments when they are due, referred to as the Servicing Rights. The Servicer is the entity that owns the Servicing Rights to a mortgage and is the entity to whom you make your monthly payments. A Lender originates the mortgage loan and may act as the Investor and the Servicer. Quite often, the Lender will elect to sell the Mortgage Rights to another Investor and to sell the Servicing Rights to a third party. You may have heard of the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”). These entities are quasi-government agencies that are the largest investors of mortgage loans in th
