Transfer of Servicing Notice Signature Requirements
by Lucy Griffin, BOL Guru
Guru Bios
Question: Is there a requirement that we keep a signed copy of the transfer of servicing notice in the loan file? What happens if the customer never signed it and the settlement agent failed to collect it?
Answer: First, under RESPA as it reads today, this should no longer be a violation. Congress amended RESPA to make significant simplifications to the servicing transfer rule. The amendments dropped the signature requirement and reduced the disclosure to a sentence or two. Unfortunately, many examiners still write this up as a violation because HUD hasn't cleaned up its regulation to match the act. When some examiners see the regulation in place, they don't always feel comfortable ignoring it, so they write you up. It is therefore a good practice to get signatures if you know that your examiner still looks for them. However, you can always point to the language of the law and contest the examiner's belief that not having a signature is a violation - because it isn't.
Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 9, No. 3, 4/04
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