When you get a notice of servicing transfer, it means your loan servicer is changing.
Question
I just received a notice of servicing transfer, but I'm in the middle of a foreclosure. What is this?
Answer
A notice of servicing transfer means your loan servicer is changing. This kind of transfer happens all the time in the mortgage servicing industry, even during a foreclosure.
Servicing Transfers
Servicing transfers are very common in the loan industry. When you take out a mortgage loan, there's a good chance that somewhere down the line the lender will transfer the servicing of your loan to a new servicer. (Loan servicers, among other things, collect and process loan payments on behalf of the owner of the promissory note.)
The mortgage loan owner might:
- sell the rights to service the loan separately from the note ownership, or
- sell the loan itself.
The owner of the servicing rights might also hire a vendor—called a subservicer—to take on the servicing duties, rather than servicing the loan itself.
Notification of a Servicing Transfer
Federal law requires that a current servicer and new servicer notify you in writing of any assignment, sale, or transfer of the servicing of the loan. This is probably the notice that you received.
Getting Help
If you have questions about how servicing transfers work in a foreclosure—or any questions related to foreclosure—contact a foreclosure lawyer.
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