Is there ever an acceptable time to not give at least 15 days advance notice of the change in servicer? I do not believe there is, but our mortgage lenders are insisting that they should provide the notice at funding, rather than closing, which sometimes does not provide 15 days notice. I don't know where they came up with the idea that providing it after the loan has been funded by the investor is the way to do it. One argument has been that until the investor funds the purchase, too many things can go wrong and it might not go with that investor - in the which case the Notice of Transfer would be incorrect.

I don't know why they wouldn't provide the notice at closing either. How often has a loan not gone with the investor?

Let me get very technical about the timing of the Notice of Transfer:
RESPA states it must be given 15 days prior to the "effective date of transfer" [§3500.21(d)(2)(A)] or at settlement [§3500.21(d)(2)(iii)].

The "Effective Date of transfer" is defined in §3500.2 but it simply points to section 6(i)(1) of RESPA. This section indicates it is "the date on which the mortgage payment of a borrower is first due to the transferee servicer . . ." Are you sure there isn't 15 days between funding and the first payment due?

Settlement is also defined in §3500.2. It is NOT the date of funding. It is the date of signing the legal documents (the note) which is closing.

I used to battle with this too, they thought the operations dept. was sending them out. The bank that is selling the loan has to accept the payment even if they give the servicing transfer notice. I want to say it was 30 or 60 days, which is why the Division Manager felt it could go after settlement. I encourage giving it out as soon as possible because consumers set up online banking payments with the wrong banks information and it can be difficult getting them to change. Causes havoc in the operations area.

Thanks Dave. They said at one time that they don't know who the investor is so they can't fill out the form. I pointed out that they did know who the investor was because the loan was locked with the investor and they had another document that told the borrower we were selling the loan to that investor (but that form doesn't comply with RESPA requirements). I don't think they understand the purpose of the Notice, or the Notice itself. They get "confused" when they read it.