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#2160521 - 01/16/18 04:37 PM PURCHASING LOANS WITHOUT TRANSFERING SERVICING
compliance75 Offline
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Joined: Oct 2016
Posts: 105
We are purchasing a pool of real estate mortgages without transferring the service. We are a small bank and are currently exempt from the servicing rules. How, if anything, does this affect our requirements? Besides obtaining the servicing agreement, what other steps we need to take?

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Lending Compliance
#2160525 - 01/16/18 04:44 PM Re: PURCHASING LOANS WITHOUT TRANSFERING SERVICING compliance75
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
A small creditor is not exempt from 1026.39 and the mortgage transfer disclosure rule.
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#2160526 - 01/16/18 04:47 PM Re: PURCHASING LOANS WITHOUT TRANSFERING SERVICING compliance75
compliance75 Offline
100 Club
Joined: Oct 2016
Posts: 105
Thank you, since we are not transferring the service in this purchase, do we still need to send this disclosure?

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#2160528 - 01/16/18 04:55 PM Re: PURCHASING LOANS WITHOUT TRANSFERING SERVICING compliance75
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
The purchaser of the loan sends the notice required by 1026.39, whether or not servicing is transferred.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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#2160531 - 01/16/18 05:08 PM Re: PURCHASING LOANS WITHOUT TRANSFERING SERVICING compliance75
compliance75 Offline
100 Club
Joined: Oct 2016
Posts: 105
Thank you John,

Is there any requirement to send the Privacy disclosure at this time as well?

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#2160605 - 01/16/18 08:03 PM Re: PURCHASING LOANS WITHOUT TRANSFERING SERVICING compliance75
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
For purposes of Regulation P, the customer relationship transfers with servicing rights. If there is no change in servicing involved, there's no requirement to send the new loan owner's privacy policy. §1016.4(c)(2).
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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#2212623 - 05/01/19 08:57 PM Re: PURCHASING LOANS WITHOUT TRANSFERING SERVICING compliance75
Tarhe Offline
Diamond Poster
Joined: Nov 2006
Posts: 1,403
California
Like the OP, we are purchasing our first group of mortgage loans where the original lender is retaining the servicing. The loans are apartment buildings (6+ units). As 1026.39 pertains to consumer mortgage transactions, it does not apply to our purchase, correct? Is it still a good idea to send a letter to inform the borrowers that we now own the loan? Or is that not material since we are not servicing the loans?

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