Loan Servicing & Escrow Disclosure

Your loan servicer is the organization that collects your loan payments, which can be different from your lender. Either when you first apply for your loan or within the following three business days, Real Estate Settlement Procedures Act (RESPA) requires that your lender or mortgage broker tell you in writing whether someone else may be servicing your loan.

After your settlement, if your loan servicer transfers the servicing of your loan to a new servicer, RESPA requires that you be notified in writing at least 15 days before the transfer. This notice must also inform you of when the transfer is effective and when you will begin making payments to the new servicer. Thirdly, the notice letter must include the new servicer's contact information along with any other information pertinent to your loan's servicing.

In the event that your loan requires an escrow account, your servicer must present you with an initial escrow account statement at your settlement or within the following 45 days. This statement will show all of the payments that are expected to be deposited into your escrow account and all of the
disbursements that are expected to be paid from the escrow account during the year.

On an annual basis, your servicer will review your escrow account and send you a disclosure which should include the prior year’s activity. Also, this disclosure must indicate any adjustments in the escrow payments needed for the upcoming year. However, if your loan is overdue by more than 30 days, you will not receive this disclosure. Remember that your monthly payment can increase if your taxes or insurance payments increase.

For additional questions pertaining to loan servicing and escrow services, contact Cambridge Title Company by phone at 224-330-1886 or by email at info@cambridgetitleco.com.