Notice when your loan moves to a new servicer
12 U.S.C. § 2605(b)–(d)
In plain words
When the company that collects your payments changes, both the old and new servicer must tell you in writing. The old one must usually tell you at least 15 days before the switch; the new one within 15 days after. For 60 days after the switch, a payment you send on time to the old servicer cannot be treated as late.
Who is protected
Borrowers with a federally related mortgage loan whose servicing is transferred.
When it applies
It has no special conditions: it protects everyone it names.
Check whether it applies to youWhat you can do
Keep the transfer notices and your payment proof
Save both letters and proof of every payment around the switch. If the new servicer charges a late fee or reports you late for a payment you sent on time to the old one, send a notice of error.
Deadline: The 60-day protection starts on the transfer's effective date.
Open the tool
Honest limits
- Some transfers between related companies need no notice if your payee, payment address, account number and payment amount stay the same.
- A change of servicer is not the same as a change of the loan's owner; that notice comes under TILA.
- This is general legal information, not legal advice, and it does not promise any result. A HUD-approved housing counselor or a lawyer can look at your facts.
The law
- Federal lawRESPA — servicing transfer notices and 60-day grace
12 U.S.C. § 2605(b)–(d)
Exact part: (b)–(d)
What it says: Old and new servicers must notify the borrower of a transfer, and on-time payments sent to the old servicer in the first 60 days may not be treated as late.
Read the official texthttps://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2605&num=0&edition=prelim - Federal regulationRegulation X — notices of transfer
12 C.F.R. § 1024.33(b)
Exact part: (b)
What it says: Each transferor and transferee servicer must give the borrower a notice of transfer, with set timing and content.
Read the official texthttps://www.ecfr.gov/current/title-12/part-1024/section-1024.33#p-1024.33(b) - Federal regulationRegulation X — payments during transfer
12 C.F.R. § 1024.33(c)
Exact part: (c)
What it says: During the 60 days after the transfer, an on-time payment to the old servicer may not be treated as late for any purpose.
Read the official texthttps://www.ecfr.gov/current/title-12/part-1024/section-1024.33#p-1024.33(c)
Court cases
- Homeowner wonSame topicRenfroe v. Nationstar Mortgage, LLC
Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241 (11th Cir. 2016)
a servicer that answers a borrower's written request without a reasonable investigation may be liable under RESPA when the borrower alleges resulting damages
- Homeowner wonSame topicJesinoski v. Countrywide Home Loans, Inc.
Jesinoski v. Countrywide Home Loans, Inc., 574 U.S. 259 (2015)
a borrower exercises the Truth in Lending right to rescind by notifying the lender in writing within three years, without needing to sue within that period
- Homeowner wonSame topicMarais v. Chase Home Finance LLC
Marais v. Chase Home Fin. LLC, 736 F.3d 711 (6th Cir. 2013)
a borrower who alleges actual damages, such as added interest, caused by a servicer's deficient response to a qualified written request states a RESPA claim
- Homeowner lostSame topicLage v. Ocwen Loan Servicing LLC
Lage v. Ocwen Loan Servicing LLC, 839 F.3d 1003 (11th Cir. 2016)
a servicer's duty to evaluate a loss-mitigation application depends on its being submitted more than 37 days before the sale date scheduled at that time
- Homeowner lostSame topicGresham v. Wells Fargo Bank, N.A.
Gresham v. Wells Fargo Bank, N.A., 642 F. App'x 355 (5th Cir. 2016) (per curiam) (unpublished)
the federal dual-tracking bar applies only when the servicer receives a complete loss-mitigation application more than 37 days before the foreclosure sale
- Homeowner lostSame topicWhittier v. Ocwen Loan Servicing, L.L.C.
Whittier v. Ocwen Loan Servicing, L.L.C., 594 F. App'x 833 (5th Cir. 2014) (per curiam) (unpublished)
a RESPA claim against a servicer fails without evidence of actual damages caused by the violation
Related rights
Notice when a new company becomes owner of your loan
15 U.S.C. § 1641(g)
When your mortgage loan is sold or assigned to a new owner, the new owner must tell you in writing within 30 days. The notice must include who the new owner is, how to reach it, the date of transfer, and where the transfer is recorded.
Read this rightMake your servicer fix mistakes (notice of error)
12 C.F.R. § 1024.35(a)
If your mortgage servicer made a mistake — like not crediting a payment, charging a wrong fee, or giving a wrong payoff amount — you can send a written "notice of error." The servicer must confirm it got your letter within 5 business days. It then has to fix the error or explain in writing, after a reasonable investigation, why it thinks there was no error, usually within 30 business days.
Read this rightNo discrimination in housing or home loans (Fair Housing Act)
42 U.S.C. § 3604(a)–(b)
It is illegal to discriminate in selling, renting, or financing a home because of race, color, religion, sex, disability, familial status (having children), or national origin. This covers mortgage lenders and servicers too — for example, in who gets offered a loan modification and on what terms. You can file a complaint with HUD within 1 year or go to court within 2 years.
Read this rightDispute errors on your credit report
15 U.S.C. § 1681i(a)(1)(A)
If your credit report has something wrong or incomplete — like a payment reported late that you made on time — you can dispute it with the credit bureau for free. The bureau must investigate, usually within 30 days, and fix or delete information it cannot verify.
Read this rightMake the company that reported the error investigate it
15 U.S.C. § 1681s-2(b)(1)
The company that reported the information — such as your servicer — must investigate when a credit bureau passes along your dispute, and fix what is wrong with every bureau. In many cases you can also dispute directly with that company, which must then investigate and report back to you.
Read this rightCancel private mortgage insurance (PMI) when you have enough equity
12 U.S.C. § 4902(a)
If you pay private mortgage insurance on a loan for your main home, you can ask in writing to cancel it once your balance reaches 80% of the home's original value, if you have a good payment history and are current. It must end automatically when your balance is scheduled to reach 78%, if you are current.
Read this right