Answer:
Answer by Dan Persfull:It is in the Real Estate Settlement Procedures Act at 2605(a). Here's the text we are using. However, this how we decided to disclose. The only text actually necessary is the bold text, and it does not require the bank's name. You can simply say We.
Servicing Transfer Disclosure
This disclosure is being given in compliance with Section 2605(a) of the Real Estate Settlement Procedures Act (RESPA).
The XYZ Bank may assign,
sell or transfer the servicing of your loan to another servicer any time during the term of the loan.Please contact us at the above address or telephone number if you have any questions concerning this disclosure.
Answer:
Answer by Mary Beth Guard:In terms of background on this -- the RESPA statutory provision was amended way back in the 90s to say that a lender can disclose its history of mortgage servicing transfers via a fairly short and generic description. For example, it could say it always transfers the servicing rights, or it could say it never transfers the servicing rights, or it could say it may transfer them. The one problem in this area is that HUD has not made conforming amendments to its Regulation X, which implements RESPA, so the regulation itself still has the old antiquated language relating to the statement of history that included using percentages, rounded to the nearest quartile of mortgage loans on which servicing was assigned, sold, or transferred. (See Section 3500.21) You may encounter an examiner who wants to enforce the requirement as written in the rule, rather than the statute. Don't let them bully you. I firmly believe the statute trumps the rule and you can follow the statute's lead.
First published on BankersOnline.com 5/08/06
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