Servicing of a loan transfers with an effective date of 1 July. The outgoing servicer has not yet sent its notice on 20 June and asks how much time is left. Under the ordinary servicing-transfer notice rule, by what date was the outgoing servicer required to send its notice?
Correct Answer
A) The notice was due by 16 June, being 15 days before the effective date
A. Under the ordinary rule, the outgoing servicer’s notice was due by June 16. Start with the July 1 effective date and count back 15 days to June 16. By June 20 that ordinary deadline has already passed. Scope and exceptions: The stem asks for the ordinary rule. Section 1024.33(b)(3) also provides special timing provisions; a combined notice ordinarily uses the advance deadline. Source: 1024.33(b)(3)(i)–(iii) — https://www.consumerfinance.gov/rules-policy/regulations/1024/33/
Why This Is the Correct Answer
A. Under the ordinary rule, the outgoing servicer’s notice was due by June 16. Start with the July 1 effective date and count back 15 days to June 16. By June 20 that ordinary deadline has already passed. Scope and exceptions: The stem asks for the ordinary rule. Section 1024.33(b)(3) also provides special timing provisions; a combined notice ordinarily uses the advance deadline.
Why the Other Options Are Wrong
Option B: The notice is due by 30 June, at any point before the transfer lands
One day before transfer does not provide the required advance interval.
Option C: The notice is due by 16 July, within 15 days after the effective date
The ordinary post-transfer period belongs to the incoming servicer, not this outgoing servicer.
Option D: The notice was due by 1 June, a full 30 days before the effective date
It replaces the ordinary 15-day interval with 30 days.
Exam Tip
Identify transferor versus transferee before counting notice days.
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