Which Fed Regulation covers notifying the borrower of loan sale?
Ironically, I was a mortgage Compliance Officer for 10 years, But I can’t seem to recall which federal regulation covers the requirement that a bank is required to notify the borrower when the bank sells the borrower’s loan to another investor. I’m thinking it’s a Reg C (HMDA) issue, but I can’t find that specific section.
My question is, even if a bank retains the loan servicing rights (i.e. receives the monthly payments), isn’t the bank still required to notify the borrower of the sale of the loan? I know the lender must notify the borrower when selling the loan AND servicing (as the borrower must know where to send payments), but what about just selling the loan to an investor (e.g. Fannie Mae or Freddy Mac)? Isn’t the lender still required to notify the borrower of the sale?
Please help. Thx.