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Not Doing this Could Cost You Over $2000

At live classes as well as on instructional webinars, we often receive the question, “what is a 404 transfer notice and is it important? This article will answer both of those questions.

In 2009, a new law was passed that contained a number of provisions and amendments that affected the lending industry. One section of this law, section 404, amended the Truth in Lending Act (TILA) by requiring that a new notice must be given to consumers within 30 days after the sale, transfer or assignment of the consumer’s mortgage loan.

It is the mortgage buyer’s responsibility to have these notices sent in writing and include:

  • The identity, address and telephone number of the new creditor
  • The date of the transfer
  • How to reach an agent or party having authority to act on behalf of the new creditor
  • The location of the place where transfer of ownership of the debt is recorded
  • Any other relevant information regarding the new creditor

This applies to first mortgage loans, subordinate mortgage loans, home equity loans and any other credit transaction that is secured by the principal dwelling of the consumer.

Failure to give notice can result in liability for actual and up to $2000 in statutory damages per violation plus plaintiffs reasonable attorney fees.

In conclusion, make sure that you board your notes with a servicing company and verify that they will be sending all the appropriate letters and notices out in regards to the transfer of servicing.


Kevin Shortle

Dir. of Training, NoteSchool


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