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.
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. (See Sample
Written Complaint to Lender.)
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.
name, address, and toll-free or collect call telephone number
for the new servicer.
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.
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.
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. (More
information about escrow accounts, including how to calculate
the maximum amount RESPA allows the lender to require in the escrow
(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. (The PMI
Act provides information regarding cancellation of PMI.)