How to Transfer Your Mortgage Servicer in 5 Steps
Moving a mortgage portfolio from one servicer to another runs on one federal rule, and it is more routine than most lenders expect. The borrower gets a single combined notice, two protections run for 60 days, and a clean transfer means the borrower never misses a beat. Here are the five steps.
A servicer transfer should be invisible to the borrower: one steady payment, one notice, no missed cycle. If it feels messy, the servicer did it wrong.
The short version
- Transfers run under the federal RESPA transfer rule (12 CFR §1024.33): one combined dual notice to the borrower.
- Two 60-day protections: an on-time payment to the old servicer cannot be called late, and misdirected payments get forwarded.
- Your servicing agreement sets the notice period to your current servicer (usually 30 days).
- With Moat there is no separate transfer fee; the standard $150 setup applies, and boarding runs 5 to 10 business days.
Step 1: Notify your current servicer
Give written notice that you are ending the engagement, and request the complete loan file. Your servicing agreement sets the notice period (most require 30 days). Include the loan numbers to transfer, the target effective date, where to send the file, and a request for payoff statements, escrow ledgers, and any default-related documents.
Step 2: Submit the file to the new servicer
The new servicer needs your loan documents; Moat's onboarding form lists exactly what to provide. Boarding usually takes 5 to 10 business days, with an optional $50 expedite for a 48-hour turnaround. If your old servicer is slow with the file, send the note and deed-of-trust copies you already have, and the rest can follow during boarding.
Step 3: The borrower transfer notices
The old servicer notifies the borrower at least 15 days before the effective date; the new servicer notifies within 15 days after. In practice both sign one combined notice, which names both servicers, the effective date, where to send payments, and the 60-day grace period.
Step 4: The effective date
On the effective date, the new servicer takes over payment posting, escrow, borrower communication, and statements. The old servicer transfers the escrow balance, any unapplied funds, and the full file. The new servicer reconciles against the lender ledger and confirms the takeover in writing. Escrow is set up correctly during boarding, so the borrower keeps making one steady payment instead of facing two true-ups.
Step 5: The 60-day grace period
For 60 days after the effective date, a payment the borrower sends to the old servicer on or before its due date cannot be treated as late, so no late fee applies. The old servicer must promptly forward any misdirected payment, or return it and point the borrower to the right address, and both servicers watch for strays. After day 60, the new servicer is the sole contact; the old servicer's only residual job is the year-end Form 1098 or 1099-INT for its partial year.
What it costs
With Moat, there is no separate transfer fee. The standard $150 setup per loan applies to any new boarding. Your current servicer may charge a flat file-transfer fee; most do not. Bulk portfolio transfers are quoted in writing per portfolio.
For more
The full process, the boarding-document checklist, and the servicer comparisons are on the Switching Mortgage Servicers hub.
General information about the RESPA 12 CFR §1024.33 servicing transfer process. Not legal advice. Specific deadlines and requirements depend on your existing servicing agreement and the loan type. Moat Note Servicing, LLC (NMLS 1419346) is a Texas-registered residential mortgage loan servicer (Finance Code Ch. 158).