The Federal Reserve Board has issued a final rule regarding consumer notification when a homeowner's mortgage is sold or transferred.
The rule, which goes into effect January 1, requires any person who acquires closed-end mortgages or home equity lines of credit to provide written notification to the homeowners within 30 days.
This notification requirement applies to the owner/investor, not the "party servicing the loan," the Fed says. The final rule, mandated by Congress, is designed to make it easier to seek investor permission for loan modifications.
The Fed also issued a proposed rule on Monday that raises an interest rate trigger on jumbo mortgages so fewer are required to have escrow accounts.
The proposed Home Ownership and Equity Protection Act rule raises the interest rate trigger for jumbo loans to 2.5% from 1.5%.
"For loans that exceed the Freddie Mac maximum principal balance," the final rule provides that the escrow requirement only applies if the annual percentage rate "exceeds the applicable average prime offer rate by 2.5 or more percentage points," the Fed says. The Fed is seeking public comment on this proposal for 30 days.
