(a) Servicing disclosure
statement. Within three days (excluding legal public holidays,
Saturdays, and Sundays) after a person applies for a reverse mortgage
transaction, the lender, mortgage broker who anticipates using table
funding, or dealer in a first-lien dealer loan shall provide to the
person a servicing disclosure statement that states whether the servicing
of the mortgage loan may be assigned, sold, or transferred to any
other person at any time. Appendix MS-1 of this part contains a model
form for the disclosures required under this paragraph (a). If a person
who applies for a reverse mortgage transaction is denied credit within
the three-day period, a servicing disclosure statement is not required
to be delivered.
(b) Notices of transfer
of loan servicing.
(1) Requirement for notice. Except
as provided in paragraph (b)(2) of this section, each transferor servicer
and transferee servicer of any mortgage loan shall provide to the
borrower a notice of transfer for any assignment, sale, or transfer
of the servicing of the mortgage loan. The notice must contain the
information described in paragraph (b)(4) of this section. Appendix
MS-2 of this part contains a model form for the disclosures required
under this paragraph (b).
(2) Certain transfers excluded.
(i) The following transfers are
not assignments, sales, or transfers of mortgage loan servicing for
purposes of this section if there is no change in the payee, address
to which payment must be delivered, account number, or amount of payment
due:
(A) A transfer between
affiliates;
(B) A transfer that results
from mergers or acquisitions of servicers or subservicers;
(C) A transfer that occurs between master
servicers without changing the subservicer;
(ii) The Federal Housing Administration
(FHA) is not required to provide to the borrower a notice of transfer
where a mortgage insured under the National Housing Act is assigned
to the FHA.
(3) Time of notice.
(i) In general. Except as provided in paragraphs (b)(3)(ii) and (iii) of this section,
the transferor servicer shall provide the notice of transfer to the
borrower not less than 15 days before the effective date of the transfer
of the servicing of the mortgage loan. The transferee servicer shall
provide the notice of transfer to the borrower not more than 15 days
after the effective date of the transfer. The transferor and transferee
servicers may provide a single notice, in which case the notice shall
be provided not less than 15 days before the effective date of the
transfer of the servicing of the mortgage loan.
(ii) Extended
time. The notice of transfer shall be provided to the borrower
by the transferor servicer or the transferee servicer not more than
30 days after the effective date of the transfer of the servicing
of the mortgage loan in any case in which the transfer of servicing
is preceded by:
(A) Termination
of the contract for servicing the loan for cause;
(B) Commencement of proceedings for bankruptcy
of the servicer;
(C) Commencement of
proceedings by the FDIC for conservatorship or receivership of the
servicer or an entity that owns or controls the servicer; or
(D) Commencement of proceedings by the NCUA
for appointment of a conservator or liquidating agent of the servicer
or an entity that owns or controls the servicer.
(iii) Notice provided at settlement. Notices of transfer provided
at settlement by the transferor servicer and transferee servicer,
whether as separate notices or as a combined notice, satisfy the timing
requirements of paragraph (b)(3) of this section.
(4) Contents
of notice. The notices of transfer shall include the following
information:
(i)
The effective date of the transfer of servicing;
(ii) The name, address, and a collect
call or toll-free telephone number for an employee or department of
the transferee servicer that can be contacted by the borrower to obtain
answers to servicing transfer inquiries;
(iii) The name, address, and a collect
call or toll-free telephone number for an employee or department of
the transferor servicer that can be contacted by the borrower to obtain
answers to servicing transfer inquiries;
(iv) The date on which the transferor
servicer will cease to accept payments relating to the loan and the
date on which the transferee servicer will begin to accept such payments.
These dates shall either be the same or consecutive days;
(v) Whether the transfer will affect
the terms or the continued availability of mortgage life or disability
insurance, or any other type of optional insurance, and any action
the borrower must take to maintain such coverage; and
(vi) A statement that the transfer of
servicing does not affect any term or condition of the mortgage loan
other than terms directly related to the servicing of the loan.
(c) Borrower
payments during transfer of servicing.
(1) Payments
not considered late. During the 60-day period beginning on the
effective date of transfer of the servicing of any mortgage loan,
if the transferor servicer (rather than the transferee servicer that
should properly receive payment on the loan) receives payment on or
before the applicable due date (including any grace period allowed
under the mortgage loan instruments), a payment may not be treated
as late for any purpose.
(2) Treatment of payments. Beginning on the
effective date of transfer of the servicing of any mortgage loan,
with respect to payments received incorrectly by the transferor servicer
(rather than the transferee servicer that should properly receive
the payment on the loan), the transferor servicer shall promptly either:
(i) Transfer the payment
to the transferee servicer for application to a borrower’s mortgage
loan account, or
(ii) Return the payment to the person that made the payment and notify
such person of the proper recipient of the payment.
(d) Preemption of State laws. A lender who makes a mortgage loan or a servicer shall be considered
to have complied with the provisions of any State law or regulation
requiring notice to a borrower at the time of application for a loan
or transfer of servicing of a loan if the lender or servicer complies
with the requirements of this section. Any State law requiring notice
to the borrower at the time of application or at the time of transfer
of servicing of the loan is preempted, and there shall be no additional
borrower disclosure requirements. Provisions of State law, such as
those requiring additional notices to insurance companies or taxing
authorities, are not preempted by section 6 of RESPA or this section,
and this additional information may be added to a notice provided
under this section, if permitted under State law.
