Section 1050.820  Transfer of Servicing

a)         No licensee shall sell or transfer servicing to, or accept or purchase servicing from, any entity other than a licensee or an entity exempt from licensing pursuant to Section 1-4(d) of the Act unless specifically authorized by the Director.

b)         Any licensee who is a party to an arrangement for large transfers of servicing shall make certain that sufficient staff and facilities are dedicated to the transfers to prevent inconvenience to mortgagors.

c)         Notice to Mortgagor of Transfer.  Whenever the servicing of a residential mortgage loan is transferred or sold by a licensee, or purchased or accepted by a licensee, each licensee who is a party to the arrangement shall issue to the mortgagor, simultaneous with the transfer, a notice that shall include at a minimum:  

1)         where and to whom to address questions relating to the mortgage, and a toll-free telephone arrangement of the licensee that purchased or accepted the mortgage for doing so;

2)         the name and address to whom payments are to be submitted for at least the next three months;

3)         the amount of each payment required for the next three months. However, there shall be no violation of this requirement when the licensee is unable to predict accurately precise amounts for each of the next three  months.  Examples of such situations may include a residential mortgage loan contract calling for a potential rate change during the relevant period, or the scheduled annual analysis of an escrow (impound) account for payment of a real property taxes and/or hazard insurance.

4)         the effective date of the transfer;

5)         reassurance that the transfer of servicing does not affect the terms and conditions of the mortgage;

6)         the name and address of the primary regulatory authority having jurisdiction over the residential lending activities of the entity to whom payments are to be sent.

d)         Additional Responsibilities of Transferring Licensee.  In addition to the notice to mortgagor described in subsection (c), responsibilities of a licensee who transfers or sells servicing on a residential mortgage loan shall include but not be limited to:  

1)         Promptly providing the insurance carrier or agent with a notice of transfer identifying both the policy number and loan number when servicing includes payment of hazard insurance premiums;

2)         Promptly notifying the tax-bill service or taxing authority of the transfer when servicing includes payment of real property taxes;

3)         Forward to the buying or accepting servicer:  

A)        Escrow (impound) balances;

B)        Correspondence, bills, receipts and documents relating to the transferred loans;

C)        Mortgage payments daily, for a period of at least 60 days.

e)         In addition to the notice described in subsection (c), responsibilities of a licensee buying or accepting transfer of servicing of a residential mortgage loan shall include but not be limited to:  

1)         Promptly furnishing to the customer payment identification materials required by the licensee for efficient processing of customer remittances. Examples of such items are payment coupon books and preprinted envelopes;

2)         Promptly responding to each mortgagor's questions regarding payoffs, assumptions, statements of account and general servicing procedures;

3)         Practicing forbearance with the mortgagor when sorting out transfer-related problems, including but not limited to delinquency and assessment of late charges.

(Source:  Amended at 29 Ill. Reg. 14808, effective September 26, 2005)