The short version: Federal law (12 CFR §1024.33) sets out how notes move between servicers. Each borrower is told about the transfer, usually in a single letter both servicers sign, sent at least 15 days before the effective date. For 60 days afterward, a payment mailed to the old servicer cannot be counted late. We charge no transfer fee; a transferred loan pays the same $150 setup as any other new loan.
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Why lenders move their notes
Lenders rarely leave a servicer over price alone. More often, something specific went wrong: calls and emails that take days to return, an escrow analysis that counted the tax bill twice, a year-end 1098 with the wrong interest figure, or a borrower who was given bad information. Others leave because the servicer was sold and the new owner changed the terms, or because their portfolio grew and they now need reporting the old shop cannot produce.
Texas paper has its own rules, and a servicer working across many states may not know them well. Homestead protections under Tex. Const. Art. XVI §50, the non-judicial foreclosure framework in Property Code §51.002, the Texas wrap mortgage statute, and oversight by the Texas Department of Savings and Mortgage Lending all shape how a Texas note should be handled. Texas is the only state we service.
How the federal transfer rule works
Servicing transfers are governed by RESPA (12 USC §2605) and its Regulation X rule at 12 CFR §1024.33. Three parts of it matter in practice:
- Notice from the outgoing servicer at least 15 days before the transfer takes effect.
- Notice from the incoming servicer no later than 15 days after it takes effect. The two can be combined into one letter, which is how most transfers are done.
- A 60-day safe harbor for misdirected payments. A payment the borrower sends to the old servicer within 60 days of the effective date cannot be charged a late fee or reported to the credit bureaus as late.
These rules apply to federally related mortgage loans held by servicers subject to RESPA, which includes most private notes on Texas residential property. Commercial and business-purpose loans generally fall outside RESPA, but the practical steps of a transfer are nearly identical.
A transfer, step by step
1. Give notice to your current servicer
Tell your existing servicer in writing that you are ending the engagement, and ask for the full loan file. Your servicing agreement sets the notice period, often 30 days. Many servicers will agree to a shorter window if you ask, but the agreement governs.
2. Submit our onboarding form
Send your loan documents through the onboarding form. It lists exactly what we need. The more complete the first submission, the faster boarding goes.
3. We load the loans
From a complete submission to active servicing usually takes 5 to 10 business days. The optional $50 per loan expedite brings it to about 48 hours. Your lender portal login is sent once the loans are in our system.
4. The borrower is notified
The outgoing servicer's notice must reach the borrower at least 15 days before the effective date, and ours no more than 15 days after. We normally send one combined letter. It names both servicers, gives the effective date and the new payment address, and explains the 60-day grace period.
5. We take over on the effective date
From that day, we post payments, run escrow, answer the borrower, and issue statements. The old servicer sends any escrow balance, unapplied funds, and the complete file. We reconcile those figures against your records and confirm the handoff to you in writing.
6. The 60-day grace window
Under 12 CFR §1024.33(c)(1), any payment that reaches the old servicer in the first 60 days must be passed along without a late charge or negative credit report. Both servicers watch for stray payments during that window. After day 60, we are the borrower's only point of contact.
What to collect for the file
Our onboarding form has the definitive list. Most of these documents are already in your current servicer's file, and we can help you draft the letter asking for them.
- The original note or a true copy
- The recorded deed of trust
- A complete payment history
- The current escrow ledger, if the loan has escrow
- The current homeowners insurance declarations and tax bills
- Current borrower contact details
- Copies of any notices of default or sale already sent
- Any open loss-mitigation correspondence
- 1098 and 1099-INT records issued for the current year
- A signed authorization to transfer servicing
Switching questions
How much time should I allow for a transfer?
The federal rule sets the borrower notices: at least 15 days before the effective date from the old servicer, and within 15 days after from the new one. On our side, boarding takes 5 to 10 business days from a complete submission, or about 48 hours per loan with the $50 expedite. In most cases, the longest part of the calendar is your current servicer's notice period and how fast it releases the file.
Will my borrowers have trouble making payments?
They should not. The transfer letter tells them exactly where to send the next payment. If they send it to the old servicer within 60 days of the effective date, it has to be forwarded with no late fee and no negative credit report under 12 CFR §1024.33(c)(1).
Which documents should I send to get a loan boarded?
The note or a true copy, the recorded deed of trust, the payment history, the escrow analysis and balance if there is escrow, current insurance and tax bills, and the borrower's contact information. Send any default notices, pending modifications, or loss-mitigation letters from the old servicer as well.
Can you take a loan that is delinquent or in foreclosure?
No. We board only loans that are current. A delinquent loan, or one in active foreclosure, has to be reinstated or resolved with your current servicer before it moves to us. There are no exceptions to this policy. Default and foreclosure support on loans we already service is available as a separate service on request. Ask us for a quote.
Is there a transfer fee?
Not from us. A transferred loan pays the same one-time $150 setup as any new loan. Your current servicer may charge to release the file; many do not, and some charge a flat administrative fee.
What happens with my old servicer after the transfer?
Once the 60-day window closes, the old servicer is out of the picture. Borrowers should keep their earlier correspondence and send us any open loss-mitigation paperwork. In a mid-year transfer, the old servicer often issues year-end tax forms for the months it serviced the loan, and we issue forms for the rest of the year.
This page is general information about the federal servicing transfer rules at 12 USC §2605 and 12 CFR §1024.33 as they apply to private notes secured by Texas real estate. It is not legal advice; your servicing agreement and the type of loan affect the exact deadlines. Riverstone Note Servicing, LLC is a licensed Texas mortgage servicer based in San Antonio, Texas.
