When transferring a loan, how many days prior must the servicer notify the borrower?

When transferring a loan, how many days prior must the servicer notify the borrower?

• A. 30 days
• B. 10 days
• C. 15 days
• D. 20 days

Answer: (C)

The correct response is based on regulations which dictate that a loan servicer must provide borrowers with written notice at least 15 days prior to a transfer of the servicing rights of their loan. This notice serves to inform borrowers that their loan will be transferred to a new servicer, ensuring they are aware of who to contact for future payments and inquiries. This requirement is in place to protect borrowers and maintain clear communication during the transition between service providers. In the context of mortgage servicing, the 15-day notice period allows sufficient time for borrowers to adjust to the change and understand the new processes involved. The specific timeframe is legally stipulated to avoid confusion and to promote a smooth transition, ensuring that borrowers are not left uninformed about where to direct their payments.

The correct response is based on regulations which dictate that a loan servicer must provide borrowers with written notice at least 15 days prior to a transfer of the servicing rights of their loan. This notice serves to inform borrowers that their loan will be transferred to a new servicer, ensuring they are aware of who to contact for future payments and inquiries. This requirement is in place to protect borrowers and maintain clear communication during the transition between service providers.

In the context of mortgage servicing, the 15-day notice period allows sufficient time for borrowers to adjust to the change and understand the new processes involved. The specific timeframe is legally stipulated to avoid confusion and to promote a smooth transition, ensuring that borrowers are not left uninformed about where to direct their payments.