SPOTLIGHTS

Your Rights and the Responsibilities of the Mortgage Servicer
When 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.

Duty 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.
* The name, address, and toll-free or collect call telephone number for the new servicer.
* Information 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.
* A 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.

Treatment 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 account.)

PMI (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.)

This page is located on the U.S. Department of Housing and Urban Development's Homes and Communities Web site at http://www.hud.gov:80/offices/hsg/sfh/res/rightsmtgesrvcr.cfm.

U.S. Department of Housing and Urban Development
451 7th Street, S.W., Washington, DC 20410
Telephone: (202) 708-1112  TTY: (202) 708-1455