Why Loan Servicing Matters

Beyond the Loan

As always, our goal is for you to have a swift, easy, and reliable loan experience. But a loan doesn’t stop once you’ve closed the deal. What happens thereafter is known as loan servicing, and it is perhaps the most opaque part of the loan offering—In part, because your lender may not be your servicer; and you as a borrower don’t get to choose who is (which doesn’t always bode well). So what is loan servicing, and how does Backflip help you through it?

What is Loan Servicing?

Loan servicing is all the work of managing your loan after it has been issued. This includes:

• Maintaining records
• Sending you monthly statements
• Collecting your payments
• Processing any changes to your loan
• Year-end tax reporting.

Loan servicers can be the lender who issued the loan. But more often a third-party company takes over the loan servicing from your lender.

TIP: Do make sure to keep your contact information up to date with your loan servicer so that they can reach you if there are any important changes to your loan. 

What Can a Loan Servicer Help With?

A loan servicer should be more than a bill sender. Ideally, you can contact your loan servicer with any questions about your loan, or when you need to:

• Make changes to your payment plan
• Request forbearance or deferment
• Apply for loan forgiveness or discharge
• Resolve billing errors.

The Trouble with Loan Servicers

The trouble with loan servicers is that they aren’t always easy to communicate with. Indeed, some 40% of complaints HUD receives are about loan servicers. The Why is clear: there is no business reason for them to provide great customer service to borrowers, because borrowers don’t choose their servicer. (A lender contracts a servicer after loan origination.) And, borrowers can’t fire their servicer either: the only thing they could do is refinance.

The result is poor customer service, with borrowers often facing long wait times when trying to call, and experiencing difficulty getting clear information or resolving issues. This can be extremely frustrating.

Backflip’s With You

With Backflip, you get a partner invested in your success, every step of the way. That means helping our members navigate the complexities of the post closing world. So even when your loan moves to a servicer, Backflip remains involved.

Take the draw process. A lot of lenders hand draws off to their servicer. At Backflip, we continue to handle the draw process, which is one of the reasons our virtual draws are known to be fastest and smoothest in town.

Own Your Post-Loan Experience

Loan servicing is little talked about. But at Backflip we understand the importance of a smooth and supportive post-closing journey. We know things don’t always go smoothly, and we know servicers can be tough to deal with. That’s why we stay available to answer your questions after the loan is issued, and advocate for you when dealing with your servicer.  So the next time you have a question, why not skip the hold music and email [email protected]?

Disclaimer: This article is for informational purposes only and is not legal, financial or investment advice. To obtain advice tailored to your particular circumstances, you should consult a licensed professional advisor.