Mortgage Servicing Transfer Act of 1988

Summary

Mortgage Servicing Transfer Act of 1988 - Amends the Real Estate Settlement Procedures Act of 1974 to require any person who makes federally related mortgage loans to disclose to each applicant for any such loan: (1) whether the servicing of such loan may be transferred while such loan is outstanding; and (2) if the recent practice has been to transfer the servicing of a substantial number of federally related mortgage loans, that it is likely that the servicing of such loan will be transferred. Prohibits the transfer of the servicing of any federally related mortgage loans unless the borrower has consented to such a transfer pursuant to a specific provision in the loan agreement. Prohibits the denial of a federally related mortgage loan because of an applicant's refusal to consent to any transfer of the servicing of such a mortgage loan. Requires any person transferring the servicing of a federally related mortgage loan to notify the borrower of such a transfer at the time of such transfer. Requires the transferee of such loan servicing to give similar notice to the borrower. Provides that no loan payments made during the 60-day period following such a transfer shall be treated as late and no late fee shall be imposed if the loan payment is made by the borrower on or before the due date but is remitted to the wrong servicer. Requires any servicer of a federally related mortgage loan to respond in writing to any written request by the borrower for information relating to the servicing of such loan within 20 days of the receipt of such request. Requires the continuation of any mortgage insurance which is in effect before such a transfer of the servicing of any federally related mortgage loan. Provides that if the terms of any federally related mortgage loan require the borrower to make payments to the servicer of such loan for deposit into an escrow account for the payment of property taxes and insurance, then the servicer shall: (1) make the payments for such taxes and insurance from the escrow account in a timely manner; and (2) notify the borrower of any shortage of funds in the escrow account. Imposes civil liability for failure to comply with the requirements of this Act.

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1 official file

• Introduced in House

  summary · EN · 14 July 1988

  Open at official source

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