When a loan's servicing is transferred to a new servicer, what is the typical process for borrowers?

• A. Borrowers receive notice of the transfer, continue to make payments to the new servicer, and may receive disclosures about transfer terms and contact information
• B. Borrowers may have to pay a transfer fee
• C. Borrowers cannot contact the new servicer
• D. The transfer terminates borrower obligations

Answer: (B)

When a loan’s servicing is moved to a new servicer, you’ll typically receive advance notice. The notice should explain the effective date of the transfer, the name and contact information of the new servicer, and where to send future payments. You should continue making payments, and after the transfer date you’ll start sending them to the new servicer. You’ll also get disclosures about the transfer terms and how to reach the new servicer if you have questions. A transfer fee charged to borrowers is not a standard part of servicing transfers, so that would be unusual and isn’t part of the typical process. If you have questions, you can contact the new servicer for details on payment arrangements and any escrow or account changes.