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.
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.
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:
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.
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:
Updated: Aug 13, 2013