Which law mandates that the loan servicer who receives a transferred loan must notify the borrower within 15 days?

Which law mandates that the loan servicer who receives a transferred loan must notify the borrower within 15 days?

• A. Consumer Financial Protection Bureau Regulation
• B. Truth-In-Lending Act
• C. Real Estate Settlement Procedures Act (RESPA)
• D. Dodd Frank Act

Answer: (C)

The correct answer is found in the Real Estate Settlement Procedures Act (RESPA). This federal law was designed to protect consumers during the home buying and mortgage process. One of its key requirements is that when a mortgage loan is transferred from one servicer to another, the new servicer must notify the borrower of this change within 15 days. This notification is essential as it provides borrowers with accurate information about where to send their payments and helps them avoid potential confusion or missed payments. RESPA aims to promote transparency in the mortgage industry and ensures that borrowers are well-informed about their loan situations. The requirement for timely notification helps maintain trust between the borrower and the lender, as it reinforces the importance of keeping borrowers informed throughout the life of their loan.

The correct answer is found in the Real Estate Settlement Procedures Act (RESPA). This federal law was designed to protect consumers during the home buying and mortgage process. One of its key requirements is that when a mortgage loan is transferred from one servicer to another, the new servicer must notify the borrower of this change within 15 days. This notification is essential as it provides borrowers with accurate information about where to send their payments and helps them avoid potential confusion or missed payments.

RESPA aims to promote transparency in the mortgage industry and ensures that borrowers are well-informed about their loan situations. The requirement for timely notification helps maintain trust between the borrower and the lender, as it reinforces the importance of keeping borrowers informed throughout the life of their loan.