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#2131146 - 05/19/17 11:53 AM Notice of Servicing Transfer - Multiple Borrowers
Justin C. Offline
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Registered: 10/22/15
Posts: 318
What is the understanding regarding sending out the Notice of Transfer of Loan Servicing as required by 12 CFR 1024.33(b) when multiple borrowers exist? Does the disclosure need to be sent to all borrowers?

My interpretation is that it falls in line with the requirements for the Servicing Disclosure Statement required by 12 CFR 1024.33(a), specifically if there are multiple addresses listed by the different borrowers, then it is required to send the disclosure to each distinct borrower address. This would seem to be implied in the commentary to 12 CFR 1024.33(b)(3) that states: "Delivery. A servicer mailing the notice of transfer must deliver the notice to the mailing address (or addresses) . . .

Is this a wrong correlation to make? Any other references in the Regulation towards dealing with multiple borrowers that I am missing? Thank you for your time and assistance.


Edited by Justin C. (05/19/17 11:54 AM)

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Mortgage Servicing Rules
#2131199 - 05/19/17 02:43 PM Re: Notice of Servicing Transfer - Multiple Borrowers [Re: Justin C.]
Justin C. Offline
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Registered: 10/22/15
Posts: 318
Seems like I found my answer in the February 2013 Final Rule for Reg. X. The Bureau had proposed to limit it to the primary borrower (one address), but after receiving the input from various consumer advocacy groups, the Bureau decided not to adopt the original proposal and drafted commentary that included the phrase “addresses” to account for the need to send disclosures to different borrowers at different addresses as needed.

So, based on that, I stand with my above interpretation.

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#2131227 - 05/19/17 04:34 PM Re: Notice of Servicing Transfer - Multiple Borrowers [Re: Justin C.]
John Burnett Offline

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Registered: 10/27/00
Posts: 35837
Loc: Cape Cod
Agreed, Justin. One envelope if there are multiple borrowers at one address. One notice per borrower address.
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John S Burnett
BankersOnline.com
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Having the right to do something does not always means it's the right thing to do.

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#2131228 - 05/19/17 04:37 PM Re: Notice of Servicing Transfer - Multiple Borrowers [Re: Justin C.]
Justin C. Offline
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Registered: 10/22/15
Posts: 318
Thank you John. Based on the above, or did you have any other supporting regulatory speak as well? Trying to support the position to the head of servicing smile

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#2131588 - 05/23/17 05:00 PM Re: Notice of Servicing Transfer - Multiple Borrowers [Re: Justin C.]
John Burnett Offline

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Registered: 10/27/00
Posts: 35837
Loc: Cape Cod
I found the wording cited by Justin and with which I agreed. You'll find it near the end of page 10729 in the Federal Register document, which can be found here: https://www.federalregister.gov/d/2013-01248

Or. here's a link to the start of the paragraph where the discussion appears. You can page up from there a bit to digest some of the background for the decision, if you want: https://www.federalregister.gov/d/2013-01248/p-335
_________________________
John S Burnett
BankersOnline.com
Professional Compliance Nerd since 1976.

Having the right to do something does not always means it's the right thing to do.

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