Effective Date of Transfer Under RESPA

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Question:

Under the Notice of Transfer requirements in RESPA, what is considered to be the definition of the "effective date" of the transfer? I understand that the transferor is required to provide the notice 15 days prior but I don't know if that is the date the payment is due or the date the loan is actualy purchased by the investor.

Answer:

12 U.S.C. Sec. 2605 Servicing of mortgage loans and administration of escrow accounts -- Disclosure to applicant relating to assignment, sale, or transfer of loan servicing
(i) For purposes of this section:

(1) Effective date of transfer -- The term “effective date of transfer” means the date on which the mortgage payment of a borrower is first due to the transferee servicer of a mortgage loan pursuant to the assignment, sale, or transfer of the servicing of the mortgage loan.

24 CFR Section 3500.2 Definitions.
In the case of a home equity conversion mortgage or reverse mortgage as referenced in this section, the effective date of transfer is the transfer date agreed upon by the transferee servicer and the transferor servicer.

First published on BankersOnline.com 10/20/03