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#2295782 - 04/10/24 10:30 PM Is this technically a transfer of servicing?
Compliance0411 Offline
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Joined: Jun 2022
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We servicing our loans inhouse however, we for servicing purposes, we take the loan number at the time of closing (which is 9 digits) and have to add a trailing digit since the loan servicing platform needs 10 digits. I realize this is technically changing the account number so I am required to do a Hello/Goodbye letter even though nothing else is changing?

I feel the letter will confuse customers as the name and address and most of the account number will be the same. Might cause undue confusion.

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RESPA
#2295786 - 04/11/24 02:18 AM Re: Is this technically a transfer of servicing? Compliance0411
rlcarey Offline
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rlcarey
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Galveston, TX
Assigning a new account number to a loan is not a transfer of servicing.
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#2295788 - 04/11/24 12:47 PM Re: Is this technically a transfer of servicing? Compliance0411
rlcarey Offline
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rlcarey
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Posts: 83,586
Galveston, TX
Also, if your servicing system is adding a check digit, why don't you do that on your origination system. Sounds like a confusing situation for your customers. I also hope this has no impact on processing payments timely.
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#2295827 - 04/11/24 08:06 PM Re: Is this technically a transfer of servicing? rlcarey
Compliance0411 Offline
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Joined: Jun 2022
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Am I misinterpreting this section:

§ 1024.33 Mortgage servicing transfers. regulation X
(b) Notices of transfer of loan servicing —

Official interpretation of 33(b) Notices of transfer of loan servicing.

(1) Requirement for notice. Except as provided in paragraph (b)(2) of this section, each transferor servicer and transferee servicer of any mortgage loan shall provide to the borrower a notice of transfer for any assignment, sale, or transfer of the servicing of the mortgage loan. The notice must contain the information described in paragraph (b)(4) of this section. Appendix MS-2 of this part contains a model form for the disclosures required under this paragraph (b).

(2) Certain transfers excluded.

(i) The following transfers are not assignments, sales, or transfers of mortgage loan servicing for purposes of this section if there is no change in the payee, address to which payment must be delivered, account number, or amount of payment due:

(A) A transfer between affiliates;

(B) A transfer that results from mergers or acquisitions of servicers or subservicers;

(C) A transfer that occurs between master servicers without changing the subservicer;

(ii) The Federal Housing Administration (FHA) is not required to provide to the borrower a notice of transfer where a mortgage insured under the National Housing Act is assigned to the FHA.

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#2295831 - 04/11/24 08:37 PM Re: Is this technically a transfer of servicing? Compliance0411
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,586
Galveston, TX
I thought you said these loans were being serviced "in-house". A transfer of servicing involves two separate servicing parties. Not a change of the account numbers. Lenders change account numbers all the time via system conversions. You just need to notify them of the correct account number and make sure you process their payments timely during the transition. But the best thing to do is fix the problem from the start.
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#2295836 - 04/11/24 10:12 PM Re: Is this technically a transfer of servicing? Compliance0411
Compliance0411 Offline
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Joined: Jun 2022
Posts: 29
It's all one company. So you are saying this doesn't apply and I don't have to do a hello/goodbye letter?

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#2295838 - 04/12/24 10:44 AM Re: Is this technically a transfer of servicing? Compliance0411
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,586
Galveston, TX
Why would you have to provide the letter below? A new servicer is not going to be collecting payments. If this impacts the loan number they need to get their payments posted, sure you need to notify them. But that notification is not governed under RESPA.


NOTICE OF SERVICING TRANSFER

The servicing of your mortgage loan is being transferred, effective [Date]. This means that after this date, a new servicer will be collecting your mortgage loan payments from you. Nothing else about your mortgage loan will change.

[Name of present servicer] is now collecting your payments. [Name of present servicer] will stop accepting payments received from you after [Date].

[Name of new servicer] will collect your payments going forward. Your new servicer will start accepting payments received from you on [Date].
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