Mortgage companies and lenders frequently sell the home loans they create to raise additional funds for lending to other borrowers. In addition, servicing rights that are unrelated to the underlying loans are frequently bought and sold. Throughout the term of your loan, a transfer could occur at any time.
Your loan was probably one of many that were transferred as part of a package deal if you learn that your servicer is changing. When your lender transfers the servicing, a new business takes over day-to-day account management.
A servicing transfer simply means that you, the borrower, will send your payments to a different business. Additionally, that business will now look after your escrow account, respond to inquiries about your loan, and oversee the foreclosure procedure in the event that you fall behind on payments. Although a servicing transfer is typically nothing to worry about, you should be aware of your rights as a borrower. For instance, you should be aware of your right to transfer notice as well as what to anticipate both during and after the transfer.
Getting Notice of a Servicing Transfer
If your lender transfers your loan to a new servicer, both your current servicer and the new servicer are required by the Real Estate Settlement Procedures Act (RESPA) to write you a letter. In the mortgage industry, these letters are typically referred to as “goodbye” and “hello” letters.
The old servicer must typically send you a notice of servicing transfer (a farewell letter) at least 15 days prior to the transfer’s effective date. A servicing transfer notice (hello letter) from your new servicer must be delivered within 15 days of the transfer date. Alternately, the servicers may decide to send a single notice at least 15 days prior to the transfer. Information from the servicers’ “hello” and “goodbye” letters will be combined into one letter. (12 C. F. R. § 1024. 33). Avoiding Servicing Transfer Scams.
Borrowers occasionally, but occasionally, receive a scammer letter claiming that a new servicer is managing their loan. In this scheme, a fraudster poses as the new servicer and steals the borrowers’ monthly payments. If you only receive one letter regarding a servicing transfer, make sure it is from both servicers and contains all necessary information (see below). Before sending any payments to a new servicer, confirm the transfer by calling your current servicer (find their number on the Internet or on your mortgage statement).
What’s in a Servicing Transfer Notice?
A notice of transfer will inform you of where and when to send your monthly payment, as well as your rights and what to do if you have any inquiries regarding the loan’s servicing.
According to the law, a notice of transfer must specifically contain the following details:
What Happens If You Send Your Payment to the Old Servicer After a Transfer
According to federal law, the previous servicer has two options if it receives your payment following the loan transfer:
To avoid late fees and account processing delays in the future, make sure to send the payment to the new servicer.
You Get a 60-Day Grace Period After a Servicing Transfer
If you accidentally send a payment to the previous servicer, the new servicer cannot consider it to be late if:
If you accidentally sent a payment to the old servicer during this time, as long as the old servicer receives the money before it’s due (including any grace period permitted by the mortgage documents), the new servicer cannot impose a late charge or treat the payment as late for any other purposes.
What to Do If a Problem Arises
Sometimes, during a transfer, payments sent to the old servicer are lost, which results in the new servicer possibly not crediting the money to your account. Contact your new servicer and ask them to credit the account if you send a payment to the old servicer but it isn’t returned and they don’t credit it to your account. You can call the servicer and send copies of any supporting documentation, along with an “notice of error,” to the old and new servicers. Federal law mandates that both the new and old servicers must look into and respond after you send the servicers your notices of errors (so long as the servicing transfer happened less than a year ago). (12 C. F. R. § 1024. 35. ).
Continue paying the new servicer your regular payments as scheduled while the servicers investigate the situation. For at least two months, keep an eye on your account with the new servicer to make sure the funds are being credited to it.
Consider speaking with an attorney to learn how you can enforce your rights if the new servicer declines to credit a payment you sent the previous servicer to your account.
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Why is the servicing of my loan being transferred?
A servicing transfer simply means that you, the borrower, will send your payments to a different business. Additionally, that business will now look after your escrow account, respond to inquiries about your loan, and oversee the foreclosure procedure in the event that you fall behind on payments.
Is specialized loan servicing legitimate?
Is Specialized Loan Servicing Legit? Yes. A mortgage servicing business called Specialized Loan Servicing, LLC, collects on residential mortgages. Many customers will get a notification from SLS even though their mortgage was initially held by Bank of America or even Country Wide.
Why did my mortgage loan get transferred?
Mortgage servicers receive fees for managing your account, and occasionally they might decide to sell the rights to manage your mortgage to another business. Your mortgage may be sold without your permission, and your loan may be sold more than once.
What happens when your loan gets transferred?
Until you receive the letter from the new lender, you should keep paying your old lender. Borrowers are given a 60-day grace period while the loan is transferred, during which the new lender cannot charge late fees or deem the loan delinquent.