On May 20, 2009, the President signed into law the “Helping Families Save Their Homes Act of 2009” (Public Law 111-22). Section 404(a) of the Act amends Section 131 of the Truth in Lending Act (TILA) to require that a borrower be notified in writing not later than 30 days after the borrower’s mortgage loan has been sold, transferred, or assigned. The notice must include information identifying the new creditor, the date of transfer, how to reach the new creditor, the location of where the transfer of the loan is recorded, and other relevant information regarding the new creditor. The new creditor is required to give this notice and the notice applies only to a consumer loan secured by the borrower’s principal dwelling. Please do not confuse this new TILA notice with the notice of transfer of servicing required by the Real Estate Settlement Procedures Act (RESPA). This new TILA notice is separate and distinct from the notice of transfer of servicing required under RESPA. Yesterday, I discussed this new TILA notice requirement with a senior attorney in the Consumer and Community Affairs division of the Federal Reserve Board (FRB). I was informed that this TILA notice requirement is presently effective and that the FRB will be issuing Regulation Z regulations clarifying this new disclosure requirement, which may include a model form.

Complete Memorandum