As one of the most reputable lenders in the private real estate investment market, CIVIC takes pride in its customer service. That is why investors nationwide trust CIVIC to help guide them throughout the entire home investment purchasing process, from loan origination through closing. However, while most investors focus solely on the initial steps of financing (approval, locking rates, documentation, wire transfers, final sale), the loan management process doesn’t end at the sale. Beyond closing, investors will rely on loan servicers to help navigate the loan lifecycle until its finality. But what is a loan servicer?
In this article, CIVIC will take investors beyond the closing table and explain what a loan mortgage servicer is, what they do, and how they can help keep you and your investments accountable, informed, and protected.
Loan Servicer Meaning
So, what is loan servicing? Once the sale of a property is complete and your loan is active, most lenders hand off the day-to-day management of your loan to a third-party loan servicer. A loan servicer is an individual or company that manages all after-closing processes, like:
- Monthly payments
- Records keeping
- Defaults and delinquencies
Loan Servicer vs. Lender
The idea that your lender is not managing your loan may be confusing. However, the difference between a loan servicer vs. a lender comes down to timing and responsibilities. Lenders are responsible for vetting and approving borrowers, underwriting and drafting documents, funding, and closing the purchasing deal. Loan servicers, on the other hand, manage the loan once it is funded.
The Loan Servicing Process Flow
To simplify what a loan servicer does, let’s look at what the loan servicing process flow looks like for clients once their loan is transferred to a loan servicer:
- Welcome Letter: Clients will often receive a welcome letter from the loan servicer they will be working with. This document provides information outlining where to send payments and how to contact the servicer for customer support.
- Monthly Payment Management: Servicers collect principal, interest, and escrow (if applicable) payments.
- Escrow & Records: Loan servicers track balances, tax payments, and insurance renewals to ensure clients’ accounts are in good standing and comply with the conditions of the mortgage.
- Investor Support: Loan servicers are available around the clock to answer questions regarding billing, adjustments, or any other concerns clients may have.
Loan servicing fees are often baked into a borrower’s monthly payments and can be anywhere from 0.25% to 0.50% of the outstanding loan balance. However, these fees can vary depending on loan type and lender.
Why Does CIVIC Use Third-Party Services?
So, what is a loan servicer? Put simply, it is a third-party loan management servicer here to make your life easier. CIVIC partners with reputable loan servicers to maintain a seamless financing experience for our clients throughout the entire loan lifecycle. This allows CIVIC to focus on what it does best–providing reliable and flexible financing and helping investors grow their portfolio–while ensuring borrowers continue receiving the superior service long after the ink dries on the closing of a property.
Through CIVIC’s third-party loan servicers, borrowers can expect:
- On-time and consistent billing, with payments typically due on the first of the month and clearly outlined grace periods per your loan agreement.
- Clear communication regarding any changes to or adjustments to payments, escrow, or insurance requirements.
- Available and reliable service for any and all loan-related servicing questions, like payment histories, statements, payoff requests, and more.
If questions arise regarding monthly payments or you notice an error in your statement, you can contact your loan servicer directly to gain insights into the matter or file a complaint.
A Quick Recap: Key Takeaways for CIVIC’s Loan Servicing Partners
Let’s take a second to review what loan servicing is, when to contact your loan servicer, and why CIVIC relies on loan servicers to help ensure client satisfaction:
- What is a loan servicer? A loan servicer manages your mortgage after closing, collecting payments and handling escrow.
- Loan Servicer vs. Lenders: The lender underwrites and funds the loan, while the loan servicer manages the loan after closing throughout the entire loan lifecycle.
- Loan Servicing Process Flow: CIVIC assigns a third-party loan servicer to your loan. The servicer introduces themselves in a welcome letter and provides details regarding payment dates and collection instructions. Then, the servicer helps maintain the account throughout the duration of the loan, giving updates on any adjustments to the loan, ensuring compliance, and providing customer support.
- Loan Servicing Fees: Servicing fees are already included in a client’s monthly payments and typically range from 0.25% to 0.50%
- Questions & Concerns: For any questions regarding a loan post-closing, you are encouraged to contact your loan servicer to resolve issues.
Staying in the Know
he life of a loan doesn’t end at the closing table, and neither should the service provided to help ensure investors understand and maintain the terms and conditions of it. By partnering with trusted and reliable loan service providers, CIVIC takes an extra step in ensuring our clients can stay on track when it comes to payments, maintain a good standing, and protect their long-term investments.
Our superior service and loan management processes, both before and after closing, are why investors throughout the country turn to CIVIC for their financing needs. With the most reliable capital lending programs on the market and the flexibility to tailor programs to meet your unique investment needs, CIVIC has been helping investors scale their businesses and win in a competitive real estate market for over a decade.
Our team of real estate investment experts can equip you with the best financing package for your business and goals, whether you’re looking for:
- Fix and Flip Loans
- Ground Up Financing
- Stabilized Bridge Loans
- Rental and Rental Portfolio Loan Options
Come find out how the CIVIC team and a loan service provider can give you a seamless and profitable loan management experience. CLICK HERE to learn more about CIVIC’s third-party loan servicing partners or to schedule a FREE consultation with a CIVIC team member today.
Authored by Bianca Montalvo
SEO copywriter and strategist
