Loan Boarding
Also known as: onboarding, loan onboarding, servicing onboarding, boarding a loan
Loan boarding is the process of loading a newly acquired loan's data, payment history, balances, and collateral information into a loan servicer's system after purchase. It is the first operational step after a note transaction closes, and the accuracy of this process directly affects every subsequent interaction with the borrower — from the first hello letter to resolution negotiations and regulatory compliance.
What Happens During Loan Boarding
When an investor acquires a mortgage note, they send the loan data to their servicer for boarding. The servicer's onboarding team imports the information into their servicing platform and prepares the account for active management.
The boarding process typically includes:
| Step | Description |
|---|---|
| Data import | Load loan terms, balances, interest rate, maturity date, and payment schedule from the data tape or purchase documents |
| Balance reconciliation | Verify unpaid principal balance, accrued interest, escrow balances, and corporate advances against the seller's records |
| Payment history upload | Import the borrower's payment history from the prior servicer |
| Collateral document review | Confirm key documents — promissory note, mortgage or deed of trust, assignments — are present and match the data |
| Escrow setup | Establish escrow accounts for taxes and insurance if applicable |
| Borrower record creation | Set up the borrower's account profile, contact information, and communication preferences |
| Compliance checks | Verify the loan meets regulatory requirements for servicing transfer disclosures |
The Boarding Timeline
In a typical note acquisition, loan boarding occurs within the first 30 days after closing:
| Phase | Timing | Activity |
|---|---|---|
| Closing and wire | Day 0 | Purchase closes, funds transferred |
| Data and document delivery | Days 1–5 | Investor sends loan files, data tape, and collateral to servicer |
| Boarding and reconciliation | Days 5–20 | Servicer loads data, reconciles balances, flags discrepancies |
| Goodbye letter (prior servicer) | 15+ days before transfer | Prior servicer notifies borrower of servicing change |
| Hello letter (RESPA) | After boarding complete | New servicer introduces themselves to the borrower |
| FDCPA letter | Within 30 business days | Establishes accurate accounting on the loan |
The goodbye letter from the prior servicer and the hello letter from the new servicer are regulatory requirements under RESPA. Timing these correctly is a compliance obligation, not optional.
Why Boarding Accuracy Matters
Errors during loan boarding cascade through every future interaction. If the principal balance is loaded incorrectly, every statement the borrower receives will be wrong. If the interest rate is entered improperly, loan modification calculations will be based on bad data. If the escrow balance is missing, tax and insurance payments may be mishandled.
Common boarding errors include:
- Balance discrepancies — the boarded balance does not match the seller's payoff statement or data tape
- Missing modification history — prior loan modifications not reflected in the system, causing the servicer to use outdated terms
- Incorrect payment schedule — wrong due date, payment amount, or amortization type
- Escrow shortfalls — property tax or insurance escrow amounts not carried over from the prior servicer
Investors should audit boarded data within the first 30 days by comparing the servicer's system records against the purchase documents and collateral file.
Investor's Role in Boarding
While the servicer performs the technical boarding work, the investor is responsible for providing accurate and complete information. This means delivering:
- A clean data tape or loan schedule with current balances and terms
- The complete collateral file (original note, mortgage, assignments, modification agreements)
- Prior servicer contact information for any balance reconciliation questions
- Special instructions — such as whether to begin outreach immediately or wait for a specific trigger
For non-performing loans, investors should communicate their resolution strategy during boarding so the servicer understands the context. A loan being boarded for active loss mitigation requires different handling than a performing loan that simply needs routine payment collection.
Boarding Fees
Most servicers charge a one-time boarding fee per loan, typically ranging from $50 to $150 depending on the servicer and loan complexity. This fee covers data entry, balance reconciliation, and initial compliance checks. Boarding fees are separate from ongoing monthly servicing fees and are usually non-refundable regardless of how quickly the loan resolves.
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