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What formal requirements would apply when purchasing a HELOC note and servicing?
It does not appear the Mortgage Servicing Transfer Notice technically applies.
Reg. Z 1026.40 section for HELOCs doesn’t seem to address a specific requirement for communication to customer?
It appears in comment (f)3.v to view a change in the Payment address to qualify as an “insignificant change.”Is a general notice of change in address/autopay information for payment, along with a Privacy notice, really all that is required when purchasing HELOCs? (We are exempt from reporting HELOCs for HMDA)
I keep trying to think if there is anything else that should be considered under broader UDAAP, but can’t seem to think of anything.Thanks for the great question! Have you considered, 1026.39 – Mortgage Transfer Disclosures? In addition to the privacy policy and payment info, I believe it may apply. (See below.) I’ll also see if Jack has any other thoughts.
(b) Disclosure required. Except as provided in paragraph (c) of this section, each covered person is subject to the requirements of this section and shall mail or deliver the disclosures required by this section to the consumer on or before the 30th calendar day following the date of transfer.
(a)(1) A “covered person” means any person, as defined in §1026.2(a)(22), that becomes the owner of an existing mortgage loan by acquiring legal title to the debt obligation, whether through a purchase, assignment or other transfer, and who acquires more than one mortgage loan in any twelve-month period. For purposes of this section, a servicer of a mortgage loan shall not be treated as the owner of the obligation if the servicer holds title to the loan, or title is assigned to the servicer, solely for the administrative convenience of the servicer in servicing the obligation.
(a)(2): A “mortgage loan” means:
(i) An open-end consumer credit transaction that is secured by the principal dwelling of a consumer; and
(ii) A closed-end consumer credit transaction secured by a dwelling or real property.
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