Who owns/services your mortgage and what're they like? Does it matter?
December 20, 2013 9:19 AM
We're shopping for a mortgage (in the DC area), and are feeling anxious and frustrated that 1) it's so hard to know who we'll end up with because so many lenders/originators are likely to sell our loan and/or servicing after closing, and 2) it's easy to find complaints about most servicers out there and hard to find anyone that's satisfied. What has your experience been like with the place(s) that own and/or service your mortgage? Or should we put all that to the side and just try to find someone with the best rates/fees and the best reviews/recommendations regarding smooth and quick closing?
Basically all we really want is a servicer who won't make big mistakes and has half-decent customer service and a reasonable system for payment and prepayment. (After a little research, we've lowered our expectations on this dramatically... of course we'd love an A+ kinda place but we'd settle for a solid B or B-.) And it would also be nice if whoever owns the loan is open to no/low-fee refinancing/adjustments if interest rates drop again.
What's your experience been like with your mortgage servicer(s) and/or owner(s)? Anyone happy or at least satisfied with whoever's servicing your mortgage? It seems like all we can find is bad experiences. But we still also want to know about *your* bad experiences, and who's worth actively trying to avoid and why. Please tell us everything you can about your mortgage servicer and/or owner, no matter where they fall on the spectrum!
And how much should we care about this, anyway? Of the lenders we've reached out to so far because of good reviews/recommendations regarding the application and closing process with them, some say they keep most of their loans (with either bad reviews for their servicing or little info to be found) and others sell most. Should we just accept that we're pretty likely to end up with a mediocre-to-bad servicer no matter what, and focus only on the best rates & fees and on the best closers? (We'll take recommendations for that too! We are in the DC area.)
This is all so new and overwhelming... any and all advice appreciated, thanks for your help!
Basically all we really want is a servicer who won't make big mistakes and has half-decent customer service and a reasonable system for payment and prepayment. (After a little research, we've lowered our expectations on this dramatically... of course we'd love an A+ kinda place but we'd settle for a solid B or B-.) And it would also be nice if whoever owns the loan is open to no/low-fee refinancing/adjustments if interest rates drop again.
What's your experience been like with your mortgage servicer(s) and/or owner(s)? Anyone happy or at least satisfied with whoever's servicing your mortgage? It seems like all we can find is bad experiences. But we still also want to know about *your* bad experiences, and who's worth actively trying to avoid and why. Please tell us everything you can about your mortgage servicer and/or owner, no matter where they fall on the spectrum!
And how much should we care about this, anyway? Of the lenders we've reached out to so far because of good reviews/recommendations regarding the application and closing process with them, some say they keep most of their loans (with either bad reviews for their servicing or little info to be found) and others sell most. Should we just accept that we're pretty likely to end up with a mediocre-to-bad servicer no matter what, and focus only on the best rates & fees and on the best closers? (We'll take recommendations for that too! We are in the DC area.)
This is all so new and overwhelming... any and all advice appreciated, thanks for your help!
We did our mortgage through the bank where we have checking/savings, and even after they sold it, they retained servicing, so the checks go to the same place. That seems like a good, easy option.
One way to reduce the number of headaches is to work hard, now, to limit the number of things they can screw up. If you can, do not have them take extra money every month to pay your insurance/taxes through an escrow account, as that is a classic source of headaches (there always seems to be a huge estimation error in their favor). To accomplish this we had to scramble to put 20% down and we have to put some money every month into savings ourselves to make sure we can pay the 4k or so every year, but we seem to do a much better job than banks do.
posted by muddgirl at 9:30 AM on December 20, 2013
One way to reduce the number of headaches is to work hard, now, to limit the number of things they can screw up. If you can, do not have them take extra money every month to pay your insurance/taxes through an escrow account, as that is a classic source of headaches (there always seems to be a huge estimation error in their favor). To accomplish this we had to scramble to put 20% down and we have to put some money every month into savings ourselves to make sure we can pay the 4k or so every year, but we seem to do a much better job than banks do.
posted by muddgirl at 9:30 AM on December 20, 2013
I don't know how to answer this. I mean, you're going to get a mortgage, and I don't know that you can in any way control to whom it is sold or by whom it is serviced. If you DO have that option, then try to take it.
But bad experiences I have had personally or within the family include auto pay and taxes/insurance.
1. Always read every piece of paper you get from them in the mail and act on it if needed. Don't throw it away, keep it together along with a detailed phonecall/communication log.
2. Never auto pay where they take the money from your account. Always set up an auto pay out going and completely controlled by you.
3. If you can afford it and have the level of responsibility required, do not do not do not let them take out money to escrow your insurance and taxes. If you are buying new or something else happens, the "previous year's rates" might not be worth anything. And even if it is right, they might not pay it and then you spend months on the phone with the tax and insurance people and signing waivers that there was no damage to the house while you were uninsured. Pull out X per paycheck and set it aside and don't ever touch it until tax and insurance time. If you have left over, roll it into a principal payment.
4. Find out if you are allowed to make extra principal payments. Might be worht it in the long run.
5. Always keep a copy of your tax bill / payment and insurance bills / payment with your mortgage conversation log. I've had to fax that crap to the mortgage service or to the ins company way too many annoying times.
posted by tilde at 9:31 AM on December 20, 2013
But bad experiences I have had personally or within the family include auto pay and taxes/insurance.
1. Always read every piece of paper you get from them in the mail and act on it if needed. Don't throw it away, keep it together along with a detailed phonecall/communication log.
2. Never auto pay where they take the money from your account. Always set up an auto pay out going and completely controlled by you.
3. If you can afford it and have the level of responsibility required, do not do not do not let them take out money to escrow your insurance and taxes. If you are buying new or something else happens, the "previous year's rates" might not be worth anything. And even if it is right, they might not pay it and then you spend months on the phone with the tax and insurance people and signing waivers that there was no damage to the house while you were uninsured. Pull out X per paycheck and set it aside and don't ever touch it until tax and insurance time. If you have left over, roll it into a principal payment.
4. Find out if you are allowed to make extra principal payments. Might be worht it in the long run.
5. Always keep a copy of your tax bill / payment and insurance bills / payment with your mortgage conversation log. I've had to fax that crap to the mortgage service or to the ins company way too many annoying times.
posted by tilde at 9:31 AM on December 20, 2013
My mortgage is held by Chase. It wasn't originally but the mortgage got sold a few times. They suck. This is the first year they managed to pay out the correct escrow. Usually it takes a week of phone calls.
You can find my Ask from a couple years ago - it took them 6 tries to get the correct paperwork from themselves to close on our refi.
We're looking to sell now and if they somehow manage to fuck it up, I will not be surprised.
posted by Pogo_Fuzzybutt at 9:33 AM on December 20, 2013
You can find my Ask from a couple years ago - it took them 6 tries to get the correct paperwork from themselves to close on our refi.
We're looking to sell now and if they somehow manage to fuck it up, I will not be surprised.
posted by Pogo_Fuzzybutt at 9:33 AM on December 20, 2013
Pentagon Federal Credit Union (if you're eligible to join--it's not military only, btw) services their own mortgages and does not sell their mortgages. It's a little harder to qualify but excellent services.
Otherwise, you'll be hard-pressed to find a servicer that isn't annoying; hasn't been sued; does not sometimes screw up. Even companies that retain their mortgages and handle their own servicing make mistakes. It's generally easier to clear up mistakes with a mortgage lender who does their own servicing.
Again, generally, most mortgage servicers are much better than many of the scary stories you'll hear. A screw up with your mortgage servicer is horrible and can have dreadful consequences if you don't catch it right away, but catastrophic servicer failures are happening much less often now than at the height of the mortgage crisis. Sometimes, regulation works. I say this as a person whose mortgage servicing was recently transferred and subcontracted to a company I sued more than once when I was working at a consumer protection firm.
Your best bets for protecting yourself against servicer screw-ups are:
* Keep EXCELLENT records of every dealing with your servicer. Check each month that your statement is correct and that your last payment was correctly applied. Write down, or save the confirmation emails/webpages, every electronic payment you submit. Verify your electronic payments as a routine part of your monthly budgeting/bills/financial housekeeping.
* In case of error, document every phone call with the name and operator number of each person you talk to and as much detail as possible about the calls, follow up all calls in writing. Begin the process of correcting errors the minute you discover one.
* If you can handle the administrative and fiscal responsibility, escrow your own taxes. (This may not be an option with your loan to value ratio, or your mortgage lender, or you may not want the added responsibility. It can be beneficial because you retain that money and can earn interest on it and because you won't face unexpected monthly mortgage increases if the lender decides to raise your escrow amount. Escrowing taxes is something your mortgage lender controls, but the servicer is the one who will handle collecting the tax escrow and paying your tax bill.) If you do escrow taxes, audit the tax escrow regularly and verify your property taxes are paid appropriately when due.
* Make sure your homeowner's insurance is sufficient, and make sure you send your mortgage company your annual statement of coverage. DO NOT EVER PERMIT THE MORTGAGE COMPANY TO FORCE-PAY INSURANCE or escrow your homeowners' insurance. Get and pay for your own homeowners' insurance. Never let it lapse; make sure your note holder is properly named on the policy and gets an annual notice that the coverage is in place.
* if you choose autopay, make sure you get an email reminder and verify the payment. I advise against it because autopay errors are an extra pain to correct.
Basically, as said above, give the servicer as little responsibility as possible. Keep good records. Check your payment and account every month. Begin the process of correcting any mistake immediately. Always always read correspondence from your servicer or note holder when it arrives.
As fro mortgage lenders who sell the note itself, instead of contracting out the servicing, I have no advice and less of an opinion.
posted by crush-onastick at 9:42 AM on December 20, 2013
Otherwise, you'll be hard-pressed to find a servicer that isn't annoying; hasn't been sued; does not sometimes screw up. Even companies that retain their mortgages and handle their own servicing make mistakes. It's generally easier to clear up mistakes with a mortgage lender who does their own servicing.
Again, generally, most mortgage servicers are much better than many of the scary stories you'll hear. A screw up with your mortgage servicer is horrible and can have dreadful consequences if you don't catch it right away, but catastrophic servicer failures are happening much less often now than at the height of the mortgage crisis. Sometimes, regulation works. I say this as a person whose mortgage servicing was recently transferred and subcontracted to a company I sued more than once when I was working at a consumer protection firm.
Your best bets for protecting yourself against servicer screw-ups are:
* Keep EXCELLENT records of every dealing with your servicer. Check each month that your statement is correct and that your last payment was correctly applied. Write down, or save the confirmation emails/webpages, every electronic payment you submit. Verify your electronic payments as a routine part of your monthly budgeting/bills/financial housekeeping.
* In case of error, document every phone call with the name and operator number of each person you talk to and as much detail as possible about the calls, follow up all calls in writing. Begin the process of correcting errors the minute you discover one.
* If you can handle the administrative and fiscal responsibility, escrow your own taxes. (This may not be an option with your loan to value ratio, or your mortgage lender, or you may not want the added responsibility. It can be beneficial because you retain that money and can earn interest on it and because you won't face unexpected monthly mortgage increases if the lender decides to raise your escrow amount. Escrowing taxes is something your mortgage lender controls, but the servicer is the one who will handle collecting the tax escrow and paying your tax bill.) If you do escrow taxes, audit the tax escrow regularly and verify your property taxes are paid appropriately when due.
* Make sure your homeowner's insurance is sufficient, and make sure you send your mortgage company your annual statement of coverage. DO NOT EVER PERMIT THE MORTGAGE COMPANY TO FORCE-PAY INSURANCE or escrow your homeowners' insurance. Get and pay for your own homeowners' insurance. Never let it lapse; make sure your note holder is properly named on the policy and gets an annual notice that the coverage is in place.
* if you choose autopay, make sure you get an email reminder and verify the payment. I advise against it because autopay errors are an extra pain to correct.
Basically, as said above, give the servicer as little responsibility as possible. Keep good records. Check your payment and account every month. Begin the process of correcting any mistake immediately. Always always read correspondence from your servicer or note holder when it arrives.
As fro mortgage lenders who sell the note itself, instead of contracting out the servicing, I have no advice and less of an opinion.
posted by crush-onastick at 9:42 AM on December 20, 2013
I have had an FHA loan with Wells Fargo for the past 5.5 years. We even refinanced it with them about a year and a half ago, after it had been turned into a rental house AND we had half the income that we had when we originally bought the house as our primary residence. I have never had a single bit of problem with them. They always pay property taxes and homeowners insurance out of escrow correctly and on time, there are minimal escrow adjustments (meaning: they don't misjudge escrow like some banks do) I have auto-pay set up and it's always functioned flawlessly, they send clear statements every month, and the one time I had to call about something it was taken care of quickly.
I did have a little rockiness on the refi because they miscalculated something and we had to close twice, but other than that, I have been pleasantly surprised by how not-sucky they have been, for a big bank. I don't think I would ever use them for checking/savings/credit card (credit union all the way!) but for the mortgage they've truly been great.
posted by rabbitrabbit at 9:43 AM on December 20, 2013
I did have a little rockiness on the refi because they miscalculated something and we had to close twice, but other than that, I have been pleasantly surprised by how not-sucky they have been, for a big bank. I don't think I would ever use them for checking/savings/credit card (credit union all the way!) but for the mortgage they've truly been great.
posted by rabbitrabbit at 9:43 AM on December 20, 2013
We financed a property through a little small-town bank that touted the fact they service their own mortgages. And then they sold our mortgage to another company three months later. So I wouldn't put a lot of effort into pinning down somewhere that claims it does its own servicing, though as others have mentioned, YMMV.
posted by craven_morhead at 9:45 AM on December 20, 2013
posted by craven_morhead at 9:45 AM on December 20, 2013
Wells Fargo services their own mortgages. We have our mortgage with them, and they are fine. I'm not going to jump up and down with glee over them, but they are fine. We've had only small problems.
posted by OrangeDisk at 9:51 AM on December 20, 2013
posted by OrangeDisk at 9:51 AM on December 20, 2013
We also went through a local credit union that had an in-house loan that was similar in detail to the FHA ones, but would always remain in-house. It's been very nice.
posted by bizzyb at 9:52 AM on December 20, 2013
posted by bizzyb at 9:52 AM on December 20, 2013
I've had mine sold to Citi and Chase in the past. Both were perfectly fine, I did everything electronically and they offered me the option to link with my existing accounts and transfer directly, which was excellent. Both were timely with end of year statements. These were simple mortgages with no escrow or PMI. I think I've also had Wells Fargo in the past, I liked them a bit less since I didn't have an account with them, but again - fine. I think if I had an account there it wouldn't have been any different than the other two.
posted by true at 9:53 AM on December 20, 2013
posted by true at 9:53 AM on December 20, 2013
Both for my initial mortgage and refinance in the DC area, my mortgage was promptly sold to Wells Fargo, and I had a very good experience with them. They handled all my escrow as well. I was also a Wells Fargo customer, so this was fairly convenient.
posted by deanc at 10:02 AM on December 20, 2013
posted by deanc at 10:02 AM on December 20, 2013
I just wanted to jump back in and clarify that I don't have any accounts with Wells Fargo, they pull my mortgage payment from a checking acount at my credit union and it's a non-issue, they'll link to any account for payment.
posted by rabbitrabbit at 10:08 AM on December 20, 2013
posted by rabbitrabbit at 10:08 AM on December 20, 2013
I just went through closing with NorthWest Federal Credit Union which is a DC/Northern Virginia medium sized credit union. We were pretty set on using a credit union (for silly liberal reasons), and in general credit union rates were way better than big banks. We were only putting 10% down, and most credit unions didn't care and gave us conventional loans.
Closing with NWFCU was smooth, and they'll service the loan forever, though they have sold it. I was comfortable using them as they've been great through a 2 year old car loan. They also offer a bunch of closing credits if you direct deposit with them, take a new home buyers class with them, use their appraiser, etc. And it doesn't hurt that they have a branch 0.2 mi from the new house.
The other good credit union in the area is Navy Federal. They were very close in terms of rates, but the closing credits tipped it in favor of NWFCU for us.
PenFed could be another option, though I didn't find their rates to be as good when I was looking.
All of these credit unions do have some membership criteria that can usually be circumvented by paying a one time fee ($30) to join some affiliation like the Credit Union Consumer Education Association of America or some such thing.
posted by fontophilic at 10:14 AM on December 20, 2013
Closing with NWFCU was smooth, and they'll service the loan forever, though they have sold it. I was comfortable using them as they've been great through a 2 year old car loan. They also offer a bunch of closing credits if you direct deposit with them, take a new home buyers class with them, use their appraiser, etc. And it doesn't hurt that they have a branch 0.2 mi from the new house.
The other good credit union in the area is Navy Federal. They were very close in terms of rates, but the closing credits tipped it in favor of NWFCU for us.
PenFed could be another option, though I didn't find their rates to be as good when I was looking.
All of these credit unions do have some membership criteria that can usually be circumvented by paying a one time fee ($30) to join some affiliation like the Credit Union Consumer Education Association of America or some such thing.
posted by fontophilic at 10:14 AM on December 20, 2013
Wells Fargo has had our mortgage for the full seven years or so since we purchased the property. No problems, no concerns. I'd have no qualms in recommending them, but of course ymmv.
posted by Stacey at 10:18 AM on December 20, 2013
posted by Stacey at 10:18 AM on December 20, 2013
We've had our mortgage with Wells Fargo since late 2004. They've kept ownership and are the servicer. We haven't had any customer service problems and they made it easy for us to refinance a couple of years ago.
posted by Area Man at 10:29 AM on December 20, 2013
posted by Area Man at 10:29 AM on December 20, 2013
Check their math.
Check their math.
Check their math.
If you have any concerns or disputes, even something very minor, do NOT resolve it over the phone, put it in writing. Sure, it seems easier and more reasonable to explain things to a human, but federal law dictates how mortgage servicing companies must handle written correspondence (timetable for acknowledgement, investigation, action, explanation) but not telephone contact. Learned that the hard way.
posted by desuetude at 11:38 AM on December 20, 2013
Check their math.
Check their math.
If you have any concerns or disputes, even something very minor, do NOT resolve it over the phone, put it in writing. Sure, it seems easier and more reasonable to explain things to a human, but federal law dictates how mortgage servicing companies must handle written correspondence (timetable for acknowledgement, investigation, action, explanation) but not telephone contact. Learned that the hard way.
posted by desuetude at 11:38 AM on December 20, 2013
My old mortgage was with USAA. They promised never to sell the mortgage, and they didn't.
When I was buying my current house I couldn't use USAA (they're great but slow and we were in a rush) and I went with a bank near me. The mortgage was sold immediately. I still make payments to the local bank and it hasn't been a problem, but I was a bit annoyed.
posted by The corpse in the library at 1:21 PM on December 20, 2013
When I was buying my current house I couldn't use USAA (they're great but slow and we were in a rush) and I went with a bank near me. The mortgage was sold immediately. I still make payments to the local bank and it hasn't been a problem, but I was a bit annoyed.
posted by The corpse in the library at 1:21 PM on December 20, 2013
We got our mortgage with favorable terms at a local bank; they promptly sold it to Citi, who held it for a few years and then sold it to ABN AMRO. We refied a few years later with a local credit union who has held it since.
I've really had no complaints with any of them. They were all prompt with paperwork and correct with statements and payments; Citi and ABN AMRO I sat on hold a little longer if I had a question, but not nearly as long as when I call the phone company.
I would have slightly preferred to have the mortgage stay local, with local institutions, but Citi and ABN AMRO were both fine in terms of customer service -- and Citi held my student loans for a while and were a NIGHTMARE (although not as bad as Sallie Mae!), so I have no particular love for them as a general thing. But their mortgage division was fine. I thought ABN AMRO used the least extraneous paper.
posted by Eyebrows McGee at 7:57 PM on December 20, 2013
I've really had no complaints with any of them. They were all prompt with paperwork and correct with statements and payments; Citi and ABN AMRO I sat on hold a little longer if I had a question, but not nearly as long as when I call the phone company.
I would have slightly preferred to have the mortgage stay local, with local institutions, but Citi and ABN AMRO were both fine in terms of customer service -- and Citi held my student loans for a while and were a NIGHTMARE (although not as bad as Sallie Mae!), so I have no particular love for them as a general thing. But their mortgage division was fine. I thought ABN AMRO used the least extraneous paper.
posted by Eyebrows McGee at 7:57 PM on December 20, 2013
Credit Unions FTW
Every bank we've ever worked with has been stinky at one point or another. Washington Federal was so far off the ball we spent 18 months clearing up their stupid mistake.
Our credit union not only has their sheets together, but when we got into a bit of a mire, they bent over backwards to help us over a rough patch. Unlike my sister-in-laws bank that just made things harder and harder for her, until she lost the house.
posted by BlueHorse at 5:48 PM on December 21, 2013
Every bank we've ever worked with has been stinky at one point or another. Washington Federal was so far off the ball we spent 18 months clearing up their stupid mistake.
Our credit union not only has their sheets together, but when we got into a bit of a mire, they bent over backwards to help us over a rough patch. Unlike my sister-in-laws bank that just made things harder and harder for her, until she lost the house.
posted by BlueHorse at 5:48 PM on December 21, 2013
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posted by tylerkaraszewski at 9:27 AM on December 20, 2013