The Consumer Financial Protection Bureau (CFPB) recently issued guidelines for loan servicing companies that transfer a borrower’s loan. The CFPB seems to recognize that servicing transfers can put borrowers, especially those in financial trouble, at risk of further problems. Unfortunately, these guidelines do not provide any specific mandates about how servicers should handle these transfers during the COVID-19 pandemic.

            There is already a troubled history surrounding loan transfers. This includes borrower information getting lost during the transfer, especially loan modification or other borrower assistance documents. The number of people seeking assistance will likely overwhelm even loan companies that are generally well organized. If these loans get transferred and mistakes happen, there could be huge consequences for people that are in the process of a mortgage assistance program.

            In the absence of strong regulatory oversight from the federal government, it will fall to individual homeowners to try and manage the process to the best of their abilities. If you receive notice that your loan has been transferred to a new company, make sure you immediately get in contact with the new servicer and ensure that they have properly processed your loan documents. You should also save all correspondence you receive in the mail, especially statements and letters. If you run into problems with your loan after it has been transferred, this information will be very useful to an attorney if you need to take legal action to protect your interests.