Mortgages Analyzed
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Mortgages Analyzed
Mortgage Transfer Disclosure

What is a Mortgage Transfer Disclosure?

Mortgage Transfer Disclosure

Mortgage Transfer Disclosure informs the borrower(s) that their mortgage loan has been acquired by a new lender and provides the new lender’s identity and contact information. This disclosure is required only for transfer of loans secured by the borrower's primary residence (owner occupied homes). The disclosure is generally prepared by the servicing department of the new lender and is prepared as part of their on-boarding of the loans to their system.

Complying with Regulation Z

Regulation Z, which implements Truth in Lending Act ("TILA"), requires the lender to inform the borrowers of the identity of the new owners of their mortgage and provide contact information of the party that will handle certain issues such as exercise of recession rights, payment disputes, and loan modifications. The requirement for sending this disclosure was implemented on January 1, 2011. The lender complies with the section §1026.39 of Regulation Z by sending the Mortgage Transfer Disclosure.


Contents of Mortgage Transfer Disclosure

As per §1026.39 of Regulation Z, the information that is required to be on the Mortgage Transfer Disclosure is:

  1. Loan number or other identification of the loan
  2. Name of the new lender
  3. Address of the new lender
  4. Telephone number of the new lender
  5. The date the loan was transferred
  6. Contact information of an agent or other party, if any, authorized to act on behalf of the new lender
  7. The location where the transfer of mortgage loan to the new lender is or may be recorded. If the transfer of mortgage loan has not been recorded in public records at the time the disclosure is provided, the new lender needs to state this fact.

If there are multiple lenders that are purchasing the mortgage loan, then the contact information for each of them needs to be included in the disclosure. However, if only one of them has been authorized to receive the consumer’s notice of the right to rescind and resolve issues concerning the borrower’s payments on the loan, then only the contact information of that lender may be provided.

Additionally, we recommended including the following information:

  1. Date disclosure was prepared
  2. Borrower(s) name
  3. Address of the subject property

The new lender may also provide any additional information regarding the transfer of loan.


Considerations for the Borrower

Mortgage Transfer May Not Change Payment Address

The change in ownership does not mean that loan servicer has changed. The company which handled the loan payments may be same and the borrowers may continue to send their mortgage payments to the same address. Irrespective of the change in the ownership of the loan, if the servicer changes, then the borrowers will receive a separate disclosure notice called the Servicing Transfer Disclosure Notice. Remember, Mortgage Transfer Disclosure is not the same as Servicing Transfer Disclosure Notice.


Considerations for the Lender

Timing of Mortgage Transfer Disclosure

The new lender is required to mail or deliver the Mortgage Transfer Disclosure to the borrowers on or before the 30th calendar day following the date of transfer. The date of transfer can be, at the new lender’s option, either the date of acquisition recognized in the new lender’s books and records, or the date of transfer recognized in the books and records of the transferring party.

Form of Mortgage Transfer Disclosure

The Mortgage Transfer Disclosure is required to be provided clearly and conspicuously in writing and in a form that the borrowers may keep. The disclosure may be provided in electronic form, provided that the borrowers have provided their consent for receiving disclosures in electronic format. Also, the lender will have to comply with other requirements of the E-Sign Act.

In case of loans that have multiple borrowers, the lender needs to provide the disclosure to the primary borrower.

Record Retention

Regulation Z (12 CFR §1026.25 record retention) requires the lender to maintain evidence of compliance with Regulation Z for minimum two years after the date the disclosures is required to be made. Accordingly, the lender should maintain either a copy of the disclosure in the servicing/loan file or maintain another appropriate form of evidence of sending the disclosure in its records for a minimum of 2 years.


Document Summary

Mortgage Transfer Disclosure
Informs the borrowers that their mortgage loan has been acquired by a new lender and provides the new lender’s identity and contact information
Use in Mortgages
To notify the borrower that their mortgage loan was acquired by a new lender
Other Names
Provided By
Servicer or lender. Generally prepared by the servicing department of the new lender.
Provided To
Notarization Required
Signed By
Life Cycle Stage
Maintain for minimum two years after the date the disclosure is required to be made
Model Form
Applicable Laws
CFPB Regulation Z, 12 CFR §1026.39, Mortgage transfer disclosures

Updated: Aug 11, 2013


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