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When you apply for a home mortgage, you may think that
the lender, or loan originator, will service the loan
until it is paid off or your house is sold. However, in
today's market mortgage servicing rights often are
bought and sold. The Real Estate Settlement Procedures
Act (RESPA) is a consumer protection statute. Sections 6
and 10 of RESPA provide you with certain rights
regarding the servicing of your mortgage and escrow
account. Please read this important information
concerning your rights and the responsibility of your
loan servicer.
Duty of Loan Servicer to Respond to Complaints.
If you have questions or problems with the servicing of
your loan, the servicer is required to respond to you.
Write to your servicer and call it a "qualified written
request under Section 6 of RESPA." It should be a
separate letter and not mailed with your payment. The
mortgage servicer must respond to you within 60 business
days of receipt.
Loan Transferred to New Servicer. Your loan
servicer is required to notify you in writing at least
15 days before the servicing of your loan is transferred
to a new servicer. The notice must include the following
information:
- The effective date of the transfer, the date your
current servicer will stop accepting payments and the
date the new servicer will begin accepting them.
- The name, address, and toll-free or collect call
telephone number for the new servicer.
- Information that tells whether you can continue
any optional insurance, such as mortgage life or
disability insurance, and what action, if any, you
must take to maintain coverage.
- A statement that the transfer of servicing does
not affect any term or condition of your mortgage
documents other than the terms directly related to the
servicing of the loan.
Treatment of Payments During Transfer Period.
During the 60-day period beginning on the effective date
of the transfer, the payment may not be treated as late
if you mistakenly send it to the old mortgage servicer
instead of the new one.
Escrow Account. RESPA does not require that you
maintain an escrow account for the purpose of paying
property taxes, hazard insurance, etc. Nor does RESPA
have any jurisdiction over the decision of the lender or
servicer to require or terminate an escrow account.
RESPA does, however, provide you with the following
protections with regard to the escrow account:
- If your lender or mortgage servicer requires you
to maintain an escrow account for the purpose of
paying property taxes, hazard insurance, etc., RESPA
requires that the servicer pay such items by the dates
due to avoid a penalty or late charge.
- RESPA sets limits on the maximum amount of money
the servicer may require you to maintain and pay in
the escrow account.
PMI (Private Mortgage Insurance). RESPA has no
jurisdiction over the lender's decision to require PMI.
Nor does it have any jurisdiction over the lender's
decision to cancel PMI. |
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