What is the scope of a notice of servicing transfer?

A notice of servicing transfer is a communication sent to borrowers when the servicing rights of their mortgage loan are assigned, sold, or transferred from one servicer to another. This notice is crucial because it informs the borrower about who will be managing their loan and where they should send their payments henceforth.

The notice must include specific information such as the effective date of the transfer, the new servicer’s contact information, and any changes to payment instructions, ensuring borrowers are well-informed throughout the transition. This is important for maintaining clear lines of communication and ensuring that borrowers do not miss payments or confuse their loan servicer.

In contrast, the other options do not encompass the purpose or scope of a servicing transfer notice. A termination of a loan is an entirely separate process and does not relate to servicing transfer notifications. Additionally, the notice applies universally to all loans being transferred, regardless of their payment status, thus it is not limited to delinquent loans. Lastly, while a borrower may request information regarding their loan servicing, this is not the primary purpose of the notice which must be proactively sent by the servicer when a transfer occurs.