177 SMALL ENTITY COMPLIANCE GUIDE: MORTGAGE SERVICING RULES v4.0
13.10.2 Obtaining loss mitigation documents and information
after a transfer of servicing
If you, as a transferee servicer, receive a transfer of servicing of a mortgage loan, you must
ensure that the transferor servicer timely sends you documents and information the borrower
submitted in connection with a loss mitigation
application. (Comment 41(k)(1)(i)-1.i)
You must exercise reasonable diligence to
complete a loss mitigation application, including
a facially complete application, received as a
result of a transfer. Reasonable diligence, in the
transfer context, includes ensuring that a
borrower is informed of any changes to the
application process, such as a change in the
address to which the borrower should submit
documents and information to complete the
application. Reasonable diligence also includes
ensuring that the borrower is informed about
the information and documents that are
necessary to complete the application.
(Comment 41(k)(1)(i)-1.ii)
Upon reviewing the information and documents
constituting the application, you may find that
the application includes stale or invalid
documents. In these circumstances, you may
request the borrower provide you with updated
documents and information.
(Comments 41(k)(1)(i)-1.i and 1.ii)
After the transfer of servicing, borrowers may
continue to provide documents and information
to the transferor servicer. It is incumbent upon
both you, as a transferee servicer, and the
transferor servicer to ensure that the
information and documents are transferred to
Unless you are a small servicer, your
institution’s policies and procedures, as
maintained pursuant to § 1024.38(b)(4),
should accurately reflect your obligation to
ensure you receive or transfer documents
and information submitted by a borrower in
connection with a loss mitigation application.
The Mortgage Servicing Rules also require
transferor servicers to maintain policies and
procedures with respect to the transfer of any
information reflecting the current status of
discussions with a borrower regarding loss
mitigation options and any agreements
entered into with a borrower on a loss
mitigation option. (Comment 38(b)(4)(i)-2)
Section 1024.41(c)(3) requires servicers to
provide borrowers a written notice within
five days (excluding legal holidays,
Saturdays, and Sundays) of receipt of a
complete loss mitigation application.
As a transferee servicer, you are not required
to provide a loss mitigation notice that the
transferor servicer provided prior to the
transfer. For example, if the transferor
servicer provided the notice required by
§ 1024.41(b)(2)(i)(B) prior to the transfer,
you are not required to provide the notice
again for that application.
(Comment 41(k)(1)(i)-3).