A mortgage servicer transfers the servicing of a borrower's loan to a new servicer. Under RESPA, what notice must be provided to the borrower?
Correct Answer
C) The current servicer must give written notice at least 15 days before the transfer and the new servicer within 15 days after it
Regulation X requires written notice from both servicers, but on different clocks: the transferor must deliver its notice not less than 15 days before the effective date of the transfer, and the transferee not more than 15 days after it. A single combined notice from both servicers satisfies the rule if it goes out at least 15 days before the transfer. Some transfers, such as those following termination for cause or servicer bankruptcy, get 30 days after the effective date instead. RESPA separately gives the borrower a 60-day grace period after a transfer during which a payment sent to the old servicer cannot be treated as late.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
Commingling is the illegal act of mixing client funds with a broker's personal or business operating funds, while conversion is the unauthorized use of client funds for the broker's own benefit. Both are serious violations that can result in license revocation.
Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.
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