In real estate finance, servicing loans refers to the ongoing supervision and administration of a loan after it has been originated. These activities ensure that the loan remains in good standing and that all contractual obligations are properly managed.
Loan servicing typically includes collecting monthly payments, managing reserve or escrow accounts for taxes and insurance, maintaining loan records, and initiating foreclosure proceedings in the event of default. Servicing may be performed by the lender or by a separate company acting on the lender’s behalf.
