Servicing & Administration

An administrative fee is a servicer charge for activities beyond routine monthly servicing. Note investors must factor these fees into carrying costs and.

Auto-pay is an automatic recurring payment arrangement where a borrower's mortgage payment is drafted from their bank account each month.

A borrower signed the promissory note and mortgage. Their occupancy, payment history, and financial condition drive note pricing and resolution strategy.

A breach letter notifies a borrower they have violated mortgage terms and must cure the default within a specified period or face acceleration.

A certified check is a bank-verified personal check with guaranteed funds. Note investors use certified checks to close loan purchases and collect.

A certified copy is an official document reproduction verified by a county recorder or court clerk as a true duplicate, used when the original is.

A collection letter notifies a delinquent borrower of overdue debt and the lender's intent to pursue remedies. Must comply with FDCPA, including Mini.

Collections is the process of pursuing payment from delinquent borrowers through outreach, loss mitigation, and legal remedies to resolve non-performing.

A corporate advance is a servicer payment on behalf of a delinquent borrower for taxes, insurance, or preservation. These advances are recoverable.

A creditor is the party to whom a debt is owed. In note investing, the creditor is the note holder with the right to collect payments and enforce loan.

Debt is a financial obligation to repay money owed. Note investors purchase mortgage debt at a discount, profiting from the spread between cost and.

A debtor is the person or entity legally obligated to repay a debt. Note investors must understand debtor protections under federal and state law for.

An engagement letter defines the scope of work, fees, and responsibilities between a note investor and an attorney retained for foreclosure or title work.

An escrow shortage occurs when the escrow account has insufficient funds to cover upcoming property tax or insurance payments.

An escrow surplus is an excess balance in the escrow account when more funds have been collected than needed for tax and insurance payments.

A goodbye letter is a notice from the outgoing loan servicer informing the borrower that their loan servicing is being transferred to a new company.

A hardship letter is the borrower's written explanation of why they defaulted, required during loss mitigation to evaluate workout options like.

A hello letter is a notice from the new loan servicer introducing themselves to the borrower and providing updated payment instructions after a transfer.

A homeowners' authorization letter grants a third party permission to communicate with the loan servicer on the borrower's behalf — required before.

A homeowners' options letter presents a delinquent borrower with available resolution paths — modification, payoff, forbearance, or deed in lieu — to.

An impound account is a servicer-managed reserve collecting funds for property taxes and insurance, protecting the lien holder's collateral.

A loan is the financial obligation — documented by the promissory note and secured by the mortgage — that note investors buy and sell on the secondary.

A loan counselor contacts delinquent borrowers and negotiates workout resolutions — a role often filled by the note investor, servicer, or third-party.

A loan servicing company administers mortgage notes — processing payments, managing escrow, and ensuring compliance. For note investors, a servicer is.

MERS is a private electronic registry that tracks mortgage ownership and servicing rights, eliminating recorded assignments each time a loan is sold.

Mortgage servicing rights (MSRs) are the contractual right to service a mortgage loan in exchange for a fee, tradeable as a financial asset.

An obligee is the party owed a debt — in note investing, the lender or note holder entitled to receive payments under the promissory note.

An obligor is the party legally bound to repay a debt — in note investing, the borrower who signed the promissory note and remains personally liable.

A payee is the party entitled to receive payment on a promissory note, established through the endorsement chain. In note investing, this is the investor.

Payment history is the complete record of a borrower's mortgage payments, including dates, amounts, and any missed or late payments.

Payment status classifies a loan as current, delinquent, defaulted, or in foreclosure — the primary driver of how notes are priced on the secondary market.

A payoff statement specifies the exact amount to satisfy a mortgage in full — principal, interest, and fees. Note investors use it to negotiate payoffs.

A payor is the borrower obligated to make payments on a promissory note. Their payment behavior determines whether a loan is performing or non-performing.

RESPA is the federal law governing mortgage servicing disclosures, escrow management, and borrower communications — the note investor's responsibility.

A RESPA letter is a federally required notice to borrowers when loan servicing transfers — a goodbye letter before and a hello letter after the change.

A retainer is an upfront fee paid to secure an attorney's services. Note investors most commonly pay retainers to foreclosure attorneys for NPL resolution.

A servicer is the licensed company that handles payment processing, escrow, and compliance on behalf of a mortgage note holder.

A servicer transfer moves loan servicing responsibilities from one company to another, typically triggered by a note sale or servicer change.

Skip tracing locates borrowers who cannot be reached, using public records, credit headers, and databases critical for note workout success.

Trailing documents are the original loan documents shipped to the buyer after a note sale closes, completing the physical transfer of the collateral file.