The Federal Reserve has approved a rule that requires disclosures when a mortgage is sold or transferred.
On Monday, the Federal Reserve Board approved the interim final rule that requires borrowers be notified when their mortgage loan has been sold or transferred, according to a news release from the nation’s central bank. Written disclosures are required within 30 days of a loan transfer.
The disclosure requirement went into effect when the Helping Families Save Their Homes Act was enacted in May.
The interim final rule revises Regulation Z of the Truth in Lending Act.
While the interim final rule is effective upon publication, it is optional for 60 days so that lenders have time to make any necessary operational changes. But during the 60 day transition period, parties that acquire mortgages continue to be subject to the statute’s requirements.
The fed is soliciting comment on the interim rule for 60 days before making it permanent.
