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ACH Info to New Servicer for Auto Pay

Answered by: 
John Burnett

Question: 
When a lender/servicer is accepting ACH payments from a loan customer and the loan is sold/transferred to a non-affiliate, can the ACH account information be passed to the new servicer and the auto pays continue? Or must the borrower authorize the new servicer?
Answer: 

The customer provided authority for one servicer to initiate ACH debits to the customer's account to complete loan payments. That authorization is not transferable to a new servicer. The transferor servicer and transferee servicer should work out how they will communicate with the customers and arrange for a new authorization.

First published on 12/16/2018

Filed under: 
Lending
Filed under lending as: 
Auto

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