SERVICING DISCLOSURE STATEMENT

This is a disclosure statement that your broker must give you per RESPA guidelines. The disclosure outlines the right of the lender to sell the servicing of your loan while it is still outstanding. This disclosure outlines your rights as the consumer, so please make sure you review and ask questions if there is something you do not fully understand.

If the servicing of your loan is assigned, sold, or transferred to a new servicer, you must be given written notice of that transfer. The present loan servicer must send you notice in writing of the assignment, sale, or transfer of the servicing not less than 15 days before the effective date of the transfer. The new loan servicer must also send you notice within 15 days after the effective date of the transfer.

Regardless of whether a lender sends you a notice of change in mortgage holder, you are always responsible for the payment.

NOTICE TO MORTGAGE LOAN APPLICANTS: THE RIGHT TO COLLECT YOUR MORTGAGE LOAN PAYMENTS MAY BE TRANSFERRED. FEDERAL LAW GIVES YOU CERTAIN RELATED RIGHTS. IF YOUR LOAN IS MADE, SAVE THIS STATEMENT WITH YOUR LOAN DOCUMENTS. SIGN THE ACKOWLEDGEMENT AT THE END OF THIS STATEMENT ONLY IF YOU UNDERSTAND ITS CONTENTS:

Because you are applying for a mortgage loan covered by the Real Estate Settlement Procedures Act (RESPA) (12 U.S.C. Section 2601 et seq.) you have certain rights under that Federal law.

This statement tells you about those rights. It also tells you what the chances are that the servicing for this loan may be transferred to a different loan servicer. "Servicing" refers to collecting your principal, interest and escrow account payments, if any. If your loan servicer changes, there are certain procedures that must be followed. This statement generally explains those procedures.

The design of the mortgage trading market favors loans where the servicing can be sold and resold. The benefit to the consumer is more loan products with lower rates but the problem is that some loans are sold several times which can be annoying to keep track of where to send payments.

It is important to know that your interest rate and loan terms will not change if your servicing is transferred.

» DISCLAIMER: The information contained in this article on 'SERVICING DISCLOSURE STATEMENT' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.