What does mortgage servicing include?

Mortgage servicing encompasses a variety of ongoing tasks that are critical to the administration and maintenance of a mortgage loan after it has been issued. This includes collecting payments from borrowers, managing escrow accounts where funds are set aside for property taxes and insurance, and conducting customer service related to the loan. Effective mortgage servicing ensures that the lender receives payments on time, protects the collateral (the property), and meets regulatory requirements. By focusing on these responsibilities, mortgage servicers play a vital role in maintaining liquidity in the mortgage industry and ensuring that borrowers are supported throughout the life of their loans. Understanding this component is crucial for anyone looking to grasp the broader functions of mortgage banking.