Answer by Andy Zavoina:
RESPA applicable loans require servicing transfer notices.
12 USC 2605 Servicing of mortgage loans and administration of escrow accounts -- Disclosure to applicant relating to assignment, sale, or transfer of loan servicing [Real Estate Settlement Procedures Act of 1974, Sec. 6] Each person who makes a federally related mortgage loan shall disclose to each person who applies for the loan, at the time of application for the loan, whether the servicing of the loan may be assigned, sold, or transferred to any other person at any time while the loan is outstanding.
Answer by David Dickinson:
There are 2 types of Servicing Disclosure.
- The "Servicing Disclosure Statement" required by section 3500.21(b) of RESPA; and
- The "Notice of Transfer" required by section 3500.21(d) of RESPA.
There are both required on all FIRST lien loans. #1 is required at the time of application (or within 3 days if not in person). #2 is required to be given 15 days before the effective date of transfer, if you transfer the servicing of a RESPA covered loan.
First published on BankersOnline.com 6/17/02