What is the primary function of servicing in mortgage terms?

The primary function of servicing in mortgage terms is to manage mortgage payments and related responsibilities. This aspect of mortgage servicing includes collecting monthly mortgage payments from borrowers, maintaining the loan records, managing the escrow accounts for property taxes and insurance, and providing customer service to borrowers. It ensures that all aspects of the loan are handled efficiently, contributing to the overall health of the mortgage loan.

Managing these payments and obligations is crucial for both the homeowner, who needs a reliable system for making their payments, and for the lender, who needs to ensure the loan is administered correctly and that cash flows are managed properly. Thus, servicing encompasses not only the collection of payments but also communication with borrowers, ensuring that all regulatory requirements are met, and handling any issues that may arise during the life of the loan.

In relation to the other options, underwriting involves evaluating and approving new loans, while handling the transfer of property titles pertains more to the closing process rather than ongoing loan management. Selling secondary mortgages relates to the financial market aspects of mortgage lending and is not directly involved with the day-to-day responsibilities of loan servicing.