Source: https://www.xmastips.com/which-fed-regulation-covers-notifying-the-borrower-of-loan-sale/
Timestamp: 2019-07-17 17:00:37
Document Index: 198988631

Matched Legal Cases: ['§ 766', '§765', 'art 765', '§766', '§ 766', 'art 1956', '§ 766']

Which Fed Regulation covers notifying the borrower of loan sale? - Xams Tips
Home » Mortgage Loan » Which Fed Regulation covers notifying the borrower of loan sale?
May 12, 2014 Mortgage Loan
Ironically, I was a mortgage Compliance Officer for 10 years, But I can’t seem to recall which federal regulation covers the requirement that a bank is required to notify the borrower when the bank sells the borrower’s loan to another investor. I’m thinking it’s a Reg C (HMDA) issue, but I can’t find that specific section.
My question is, even if a bank retains the loan servicing rights (i.e. receives the monthly payments), isn’t the bank still required to notify the borrower of the sale of the loan? I know the lender must notify the borrower when selling the loan AND servicing (as the borrower must know where to send payments), but what about just selling the loan to an investor (e.g. Fannie Mae or Freddy Mac)? Isn’t the lender still required to notify the borrower of the sale?
Tags: borrowercoversfannie maefreddy macloanloan servicingsalethx
1 Thought on Which Fed Regulation covers notifying the borrower of loan sale?
§ 766.351 Liquidation.
(a) General. (1) When a borrower cannot or will not meet a loan obligation, the Agency will consider liquidating the borrower’s account in accordance with this subpart.
(2) The Agency will charge protective advances against the borrower’s account as necessary to protect the Agency’s interests during liquidation in accordance with §765.203 of this chapter.
(3) When no surviving family member or third party assumes or repays a deceased borrower’s loan in accordance with part 765, subpart J, of this chapter, or when the estate does not otherwise fully repay or sell loan security to repay a deceased borrower’s FLP loans, the Agency will liquidate the security as quickly as possible in accordance with State and local requirements.
(b) Liquidation for Program borrowers. (1) If the borrower does not apply, does not accept, or is not eligible for primary loan servicing, conservation contract, market value buyout or homestead protection, and all administrative appeals are concluded, the Agency will accelerate the borrower’s account in accordance with §§766.355 and 766.356, as appropriate.
(c) Liquidation for Non-program borrowers. If a borrower has both program and Non-program loans, the borrower’s account will be handled in accordance with paragraph (b) of this section. If a borrower with only Non-program loans is in default, the borrower may liquidate voluntarily, subject to the following:
(1) The Agency may delay involuntary liquidation actions when in the Agency’s financial interest for a period not to exceed 60 days.
(2) The borrower must obtain the Agency’s consent prior to the sale of the property.
(4) The Agency will accept a conveyance offer only when it is in the Agency’s financial interest.
§ 766.352 Voluntary sale of real property and chattel.
(4) The Agency will approve the sale of property when the proceeds do not cover the borrower’s full debt only if:
(ii) The sale is in the Agency’s financial interest.
(5) If an unpaid loan balance remains after the sale, the Agency will continue to service the loan in accordance with subpart B of 7 CFR part 1956.
(iv) Obtains the Agency’s agreement for the sale.
§ 766.353 Voluntary conveyance of real property.
(3) Information on present and future income an
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