Mortgages Analyzed
 
Notice To Assignee

What is a Notice to Assignee?

Notice To Assignee

Notice to Assignee informs the purchaser or assignee that the loan which is being transferred is subject to §1026.32 and special rules under the federal Truth in Lending Act apply to the loan. For these loans, the purchaser or assignee could be liable for the claims and defenses that the borrower could assert against the creditor.

Regulation Z §1026.34(a)(2) requires this disclosure be provided to assignee or purchaser at the time of transferring (assigning or selling) the loan. This disclosure is designed to help the seller in meeting the regulatory requirements.

This disclosure is not sent to the borrower and does not have any impact on the terms or rights of the borrower.

Source :www.MortgagesAnalyzed.com

Considerations for the Seller

Timing of Notice To Assignee

The seller should provide the Notice of Assignee to the purchaser or assignee prior to or at the time of transfer of the mortgage loan.

When is a Notice To Assignee Required?

Notice of Assignee is only required for loans that are covered under Section 32. Therefore, it would apply to high cost loans that are secured by the borrower's primary residence. Section 32 does not apply to:

  1. Purchase transactions
  2. Construction Loans
  3. Reverse Mortgage loans
  4. Open end credit (HELOCs)

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, you 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 your records for a minimum of 2 years.

Source :www.MortgagesAnalyzed.com

Contents of Notice To Assignee

The only requirement under §1026.34(a)(2) Regulation Z is to provide the following disclosure in the Notice To Assignee:

Notice: This is a mortgage subject to special rules under the federal Truth in Lending Act. Purchasers or assignees of this mortgage could be liable for all claims and defenses with respect to the mortgage that the borrower could assert against the creditor.

Apart from the above information, we recommended including the following additional information:

  1. Subject Property
  2. Date Transferred
  3. Transferring Lender
  4. New Lender
  5. Loan Number
  6. Date Notice Issued
Source :www.MortgagesAnalyzed.com
 

Document Summary

 
Notice To Assignee
Purpose
Notice to Assignee informs the purchaser or assignee that the loan which is being transferred is subject to §1026.32 and special rules under the federal Truth in Lending Act apply to the loan.
Use in Mortgages
The disclosure document is used by sellers to comply with the requirements of regulation Z §1026.34(a)(2)
Other Names
None
Type
Disclosure
Provided By
Seller of Sec 32 Loan
Provided To
Buyer of Sec 32 Loan
Notarization Required
No
Signed By
None
Life Cycle Stage
Servicing
Recordkeeping
Maintain for minimum two years after the date the disclosure is required to be made.
Model Form
None. However, Reg Z provides the specific text to include in 1026.34(a)(2)
Applicable Laws
CFPB Regulation Z 12 CFR §1026.34, Prohibited acts or practices in connection with high-cost mortgages.
Source :www.MortgagesAnalyzed.com
 

Sample Documents

  1. Sample Notice To Assignee

External Links

  1. CFPB Reg Z §1026.34
  2. Learn more about HOEPA loans at Federal Trade Commission, Facts for Consumers, High-Rate, High-Fee Loans (HOEPA/Section 32 Mortgages)

Updated: Aug 13, 2013

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It informs the purchaser or assignee that the loan which is being transferred is subject to §1026.32
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