Hee hee hee. Its a little known fact that you have to go back to 1996 to find out about. Heres the history folks:
Back in 1996, President Clinton signed the Economic Growth nd Regulatory Paperwork Reduction Act (EGRPRA). Section 2103 of this act affected Section 6(a) of the Real Estate Settlement Procedures Act of 1974. Now, the kicker here is that the corresponding regulation (what we know as Reg X) was never changed. Can we say OOPPS!?
Anyway, the amendment is what streamlined the the required disclosure to mortgage loan applicants in regards to the future servicing of their loans. It also eliminated the need for the applicant to sign and acknowledge the receipt of the disclosure.
So, the statutory law was changed but the regulation never was. Capish? This is where the examiners and bankers keep getting into debates during exams. At our last compliance exam in 2002, the FDIC tried to cite us on this and I sent them packing with my supporting documentation.
Currently our GFE has a simple two line statement: " Important notice when credit is extended. The servicing of this loanmay be assigned, sold or transferred toanother person at anytime while this loan is outstanding." THE END.