Understanding Loan Servicing Transfers in NJ
Many homeowners making monthly payments on their mortgage are surprised to find that their loan has suddenly been sold or transferred to another servicer. You should be aware that servicing transfers are common and not a cause for concern, as long as your old and new servicer follow the laws regarding the transfer.
Proper Notification of Loan Servicing Transfers
You lender is allowed to sell your loan or transfer the servicing to a new company to collect payments. It can happen at any point in the life of your loan. However, you are legally entitled to be notified of the sale or transfer. If the servicing changes, you should receive two pieces of mail informing you of the change in servicer:
- A “goodbye” letter from your current servicer at least 15 days before the effective date of the transfer.
- A “hello” letter from your new servicer within 15 days of the effective date of the transfer.
Transfers Should Not Affect Your Mortgage Payment Terms in Any Way
While mortgage transfers are a common occurrence, the only thing they should change about your mortgage payments is who collects the payments. There should not be any changes to the terms of the loan.
In other words, a loan servicing transfer should not change your total loan amount, interest rate, payment schedule, or any special agreements you have with your current servicer such as a loan modification.
My New Loan Servicer Is Ignoring My Previous Agreements. What Should I Do?
Your new servicer is required by law to honor any agreement you had with your previous servicer. For example, if you had a loan modification in place, or a forbearance agreement that allows you to skip payments for a certain length of time, your new servicer must adhere to these terms.
Your new lender is violating federal law if they are:
- Neglecting to notify you of the transfer.
- Ignoring a loan modification or any prior agreement you had with your previous lender.
- Claiming you are in default when they have accepted your monthly payment.
- Changing the terms of your mortgage agreement.
- Charging late fees within the grace period of 60 days after the effective date of the transfer (per RESPA)
- Improperly pursuing foreclosure when you have not broken the terms of your mortgage.
If your mortgage was sold to a new servicing company and you are facing any of those issues, contact the Law Office of Ira J Metrick Today.